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Knowledge Management Foundations : Thinking about Thinking : How People

and Organizations Create, Represent and Use Knowledge / K.M. Wiig.

Article · January 1993

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Knowledge Management Foundations

-- Thinking about Thinking --

How People and Organizations

Create, Represent, and Use Knowledge

Karl M. Wiig

SCHEMA PRESS
Arlington, Texas
 Published and Distributed by
SCHEMA PRESS, LTD.
2131 Reflection Bay Drive Drive
Arlington, TX 76013
Phone: (817) 492-4358
E-mail: [email protected]

Copyright © 1993 by Karl M. Wiig

Downloadable Web Version

for personal and professional use

All rights reserved. Printed in the United States of America. No part of

this material may be reproduced or transmitted in any form or by any
means, electronic or mechanical, including photocopy, recording, or any
information storage and retrieval system without permission in writing
from SCHEMA PRESS, LTD.

ISBN 0-9638925-0-9
Library of Congress Catalog Card Number: 93-92803

The three volumes in this series are:

Volume 1
Knowledge Management Foundations
-- Thinking about Thinking --
How People and Organizations Create, Represent, and Use Knowledge
ISBN 0-9638925-0-9
Library of Congress Catalog Card Number: 93-92803

Volume 2
Knowledge Management
The Central Management Focus for Intelligent-Acting Organizations
ISBN 0-9638925-1-7
Library of Congress Catalog Card Number: 93-92804

Volume 3
Knowledge Management Methods
Practical Approaches to Managing Knowledge
ISBN 0-9638925-2-5
Library of Congress Catalog Card Number: 93-92802

Three-Volume Set ISBN 0-9638925-3-3

Printing: 4 5 6 7 8 9 10 96 97 98 99
Contents
Page
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. xi
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii
Part I. The Role of Knowledge in Business . . . . . . . . . . . . . . . . . . . . . . . 1
Chapter 1. Knowledge Management: An Introduction . . . . . . . . . . . . . . . . . . . . . 3
This Chapter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Setting the Stage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Do More with Less! -- Use Knowledge! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
What Is Important? The More You Know, the Easier It Is to Learn and to Provide Quality Work . . 6
The Value of Knowledge -- A Beginning Perspective . . . . . . . . . . . . . . . . . . . . 7
THREE THEMES OF KNOWLEDGE MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . 8
Knowledge Is the Foundation of the Whole Enterprise
Knowledge Management Must Make the Enterprise Intelligent-Acting
The Best Knowledge Must Be Embedded Into All Products and Services
Knowledge Assets Appear in Many Forms That We Use for Different Purposes
We Hold and Use Our Knowledge in Many Ways
Why Should I Be Concerned about Knowledge Management? . . . . . . . . . . . . . . . 12
FIND AND MANAGE THE MOST IMPORTANT KNOWLEDGE AREAS . . . . . . . . . . . . . . . . . 13
CONDUCT STRATEGIC KNOWLEDGE AUDIT TO CHANGE CORPORATE STRUCTURE AND DIRECTION . 14
BUILD A KNOWLEDGE-BASED SYSTEM TO EXPLOIT THE VALUE OF PROPRIETARY KNOWLEDGE . . 15
What Is Knowledge Management? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
THREE PILLARS OF KNOWLEDGE MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . 17
How Much Should an Organization Know about Knowledge? . . . . . . . . . . . . . . . 19
Knowledge Work Changes Our Business Environments . . . . . . . . . . . . . . . . . 21
Knowledge Can Be Managed Effectively! . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Knowledge Management Requires New Methodologies and Perspectives . . . . . . . . 26
Applications of Knowledge Management . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Chapter 2. Some Knowledge Management Concepts . . . . . . . . . . . . . . . . . . . . . . 30
This Chapter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Scopes of Knowledge Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
How Can We Learn Faster? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
The Organization’s Success Depends Directly on Everyone Acting Intelligently That, However,
Requires Excellent Knowledge! . . . . . . . . . . . . . . . . . . . . . 34
WHAT KNOWLEDGE DOES IT TAKE TO ACT INTELLIGENTLY? . . . . . . . . . . . . . . . . . . . 35
Exhibit Effective PERSONALITY TRAITS
Be Well PREPARED
Choose Appropriate TACTICS
Provide Excellent PROBLEM-SOLVING
Make Outstanding DECISIONS
STAR PERFORMERS ALSO ACT INTELLIGENTLY . . . . . . . . . . . . . . . . . . . . . . . . . 45
What Does It Mean to Work “Smarter?” . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Improve Task Organization and Workflow
Coordinate with Suppliers and Customers
Improve Use of Knowledge
Improve Knowledge Building
Improve the Work Function -- Improve the System of Production and Service
A Model for Building and Using Knowledge . . . . . . . . . . . . . . . . . . . . . . . . 51
ILLUSTRATIVE EXAMPLES OF BUILDING AND USING KNOWLEDGE . . . . . . . . . . . . . . . . 52
Illustration of Knowledge Building
Illustration of How Knowledge May Be Held
Illustration of How Knowledge Can Be Pooled
Illustration of Applying Knowledge
iv Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Represent, Create, and Use Knowledge

Page
Critical Knowledge Functions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
CKFS -- WHAT ARE THEY? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Part II. About Knowledge -- How It Is Manifested and Created . . . . . . . . . 62
Chapter 3. Knowledge Seen from Different Perspectives . . . . . . . . . . . . . . . . . . . . 63
This Chapter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Knowledge Is Multidimensional and Complex! . . . . . . . . . . . . . . . . . . . . . . . 63
Operational Definitions of Knowledge and Related Concepts . . . . . . . . . . . . . . . 65
THE DIFFERENCE BETWEEN KNOWLEDGE AND INFORMATION . . . . . . . . . . . . . . . . . . 66
OPERATIONAL AND NONOPERATIONAL KNOWLEDGE . . . . . . . . . . . . . . . . . . . . . . . 67
Five Knowledge-Related Dimensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
KNOWLEDGE MODELS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
IMPORTANT KNOWLEDGE-RELATED CONCEPTS . . . . . . . . . . . . . . . . . . . . . . . . . 74
Cognitive Aspects of Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
The Human Memory System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Specialized Areas of Our Brain
WORKING MEMORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
MEDIUM-TERM “BUFFER MEMORY” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
LONG-TERM MEMORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Procedural Memory
Conceptual Memory
Episodic Memory
Semantic Memory
Lexical Memory
Encyclopedic Memory
Priming Memory
Why Do We Forget? -- Why Do We Remember?
A Memory Scenario
Zola-Morgan’s Memory Categories
WHEN DOES INFORMATION BECOME KNOWLEDGE? . . . . . . . . . . . . . . . . . . . . . . 90
Warning!! -- Our Memory Does Not Know Fact From Fiction! . . . . . . . . . . . . . . 91
Our Biases May Be Both Arbitrary and Capricious -- Even Irrational!
We Do Not Remember What Was Fantasy and What Was Reality!
OPINIONS AND JUDGMENTS OFTEN ARE BASED ON MISCONCEPTIONS . . . . . . . . . . . . . . 93
Chapter 4. How We Organize and Hold Knowledge . . . . . . . . . . . . . . . . . . . . . . . 94
This Chapter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Organization of Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Some Useful Characteristics of Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Completeness
Connectedness
Congruency
Perspective and Purpose
Qualitative Knowledge
Certainty, Uncertainty, and Qualitative Opinions and Values -- “Fuzziness”
Internalization and Understanding
Conceptual Chunking and Hierarchialization
Associations and Relational Connections
Schemas -- Abstract and General Mental Models . . . . . . . . . . . . . . . . . . . . . . 106
The Way We Hold Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
PROCEDURAL AND EMBEDDED KNOWLEDGE - COMPILING AND AUTOMATING KNOWLEDGE . . . . 107
THE CASE OF THE STAGNATED PROFESSIONAL . . . . . . . . . . . . . . . . . . . . . . . . . 109
COMPETENCE AND PERFORMANCE KNOWLEDGE . . . . . . . . . . . . . . . . . . . . . . . . . 110
Schemas, Scripts, Episodes, Events, Routines -- Knowing about Cause-and-Effects and Dynamic
Situations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
DEVELOPMENT OF SCHEMAS, SCRIPTS, AND ROUTINES .. . . . . . . . . . . . . . . . . . . . 114
HOW AUTOMATIC ARE OUR ROUTINES? . . . . . . . . . . . . . . . . . . . . . . . . . .. . 115
DOES EVERYBODY GENERALIZE KNOWLEDGE TO THE SAME EXTENT? . . . . . . . . . . . . . . . 116
ACHIEVE PROFICIENCY -- THE NEED TO INTERNALIZE KNOWLEDGE . . . . . . . . . . . . . . . 117
PRIMING OR REMINDING THROUGH SHARED SCHEMAS . . . . . . . . . . . . . . . . . . . . . . 117
OBSERVATIONS ON ROUTINES AND RIGID BEHAVIOR . . . . . . . . . . . . . . . . . . . . . . . 118
Four Conceptual Knowledge Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
GOAL-SETTING OR IDEALISTIC Knowledge -- Vision and Paradigm Knowledge
Contents v

Page
SYSTEMATIC Knowledge -- System, Schema, and Reference Methodology Knowledge
PRAGMATIC Knowledge -- Decision-Making and Factual Knowledge
AUTOMATIC Knowledge -- Routine Working Knowledge
Some Conceptual Levels Have More Explicit Knowledge Than Others
The Four Conceptual Levels Can Be Found at All Abstraction Strata
A MEASURE OF THE AMOUNT OF KNOWLEDGE -- THE SEMESTER HOUR EQUIVALENT . . . . . . 127
Knowledge Holders and Cognitive Styles . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
Professional Practitioners
Practical Knowledge Workers
Performers
Communicating Negotiators
General Perspectives
A Generic View of Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
THREE FORMS OF KNOWLEDGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
Public Knowledge -- The Most Accessible Knowledge
Shared Expertise -- Explicit Proprietary Knowledge Assets
Tacit Personal Knowledge Is Least Accessible and Most Complete
FOUR TYPES OF KNOWLEDGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
Factual Knowledge -- Concrete and Reality-Connected Details
Conceptual Knowledge -- Our Abstract Models of the World
Expectational Knowledge -- Our Accumulated Experiences and Associations
Methodological Knowledge -- What Do I Do Now?
A LITTLE KNOWLEDGE CAN BE DANGEROUS! . . . . . . . . . . . . . . . . . . . . . . . . . . 139
Different Manifestations of Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
THREE KINDS OF EMBEDDED KNOWLEDGE . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
Chapter 5. Approaches to Characterizing Knowledge . . . . . . . . . . . . . . . . . . . . . . 143
This Chapter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
General Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
Issues of Knowledge Measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
Proficiency Levels and Expertise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
Knowledge Profiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
Descriptions of Knowledge at Different Levels of Detail . . . . . . . . . . . . . . . . . . 151
EXAMPLE DESCRIPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
What the Knowledge Is about
Characterizations of the Knowledge Itself
Conceptual Knowledge Levels Revisited . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
Schemas, Scripts, Episodes, Events, and Routines . . . . . . . . . . . . . . . . . . . . . . 156
Declarative Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
Representation of Abstract Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
Abstract Concepts Are Represented by Discrete State Brackets
Crude Oil Traders Also Maintain Abstract Concepts
ABSTRACT KNOWLEDGE CAN BE CODIFIED, EVEN AUTOMATED . . . . . . . . . . . . . . . . . . 163
Building Mental Models for Abstract Concepts . . . . . . . . . . . . . . . . . . . . . . . . 164
Knowledge Scripting and Work Function Profiling . . . . . . . . . . . . . . . . . . . . 165
Composition of Knowledge-Intensive Work
Example of Knowledge Profiling for Customer Service
Task Environment Analysis and Modeling . . . . . . . . . . . . . . . . . . . . . . . . . 170
Other Ways to Characterize Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
OVERVIEW OF CHARACTERIZATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
Knowledge Flow Models
Concept Hierarchies and Concept Relatedness -- Associative and Semantic Networks
Matrix Representation of Knowledge Forms and Types
Scripts
Natural Language Knowledge Models and Stories
Codified Knowledge Models
Part III. About Knowledge: How It Is Exchanged and Used . . . . . . . . . . . . . . 177

Chapter 6. Learn! -- Create and Exchange Knowledge . . . . . . . . . . . . . . . . . . . . . 179

This Chapter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179
We Need Knowledge to Improve! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
THE IDEAL KNOWLEDGE WORKER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
Different Knowledge Results in Different Capabilities
vi Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Represent, Create, and Use Knowledge

Page
Narrow-Mindedness and Broad-Mindedness Are Often a Function of the Individual’s Knowledge!
Innovate and Create Knowledge! Some Principles of Knowledge Creation and Knowledge Building . 183
ON ADDING KNOWLEDGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184
Acquire Knowledge from Outside Sources
Create New Knowledge Through Reasoning and Analysis
CREATIVITY AND INNOVATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
Explore, Experiment, and Innovate to Create New Knowledge
REPETITION IS REQUIRED TO GAIN PROFICIENCY . . . . . . . . . . . . . . . . . . . . . . . . 186
Lack of Repetition Is Often the Scourge of Training Programs
Some Basics on Learning and Knowledge Flows . . . . . . . . . . . . . . . . . . . . . . 188
KNOWLEDGE FLOWS AND LEARNING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
Learning Theory Perspective
Five Stages of Learning
Seven Basic Learning Strategies
Knowledge Flows
Organizations Need to Learn Too! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193
Example of an Aggressive Learning Organization
Different Learning Processes
ORGANIZATIONS LEARN BY TRANSLATING EXPERIENCES INTO REFERENCE CASES -- DOCUMENT LESSONS-
LEARNED! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194
Personal Learning -- Build Knowledge in People . . . . . . . . . . . . . . . . . . . . . 196
Transfer Knowledge Between People
PEOPLE HAVE DIFFERENT LEARNING STYLES . . . . . . . . . . . . . . . . . . . . . . . . . . 198
DIFFERENT KNOWLEDGE-CREATION AND LEARNING PROCESSES . . . . . . . . . . . . . . . . . 200
Personal Knowledge Building Processes
Top-Down Learning -- Schema, Script, Routine, and Event Learning
Bottom-Up Learning -- Event, Routine, Script, and Schema Learning
BUILDING AND INTERNALIZING PERSONAL KNOWLEDGE . . . . . . . . . . . . . . . . . . . . . 206
Changing Beliefs Is Not Always Easy
Learning and the Four Conceptual Knowledge Levels
A Model for Effective Teaching . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208
SOME ASPECTS OF THE EFFECTIVE TEACHING MODEL . . . . . . . . . . . . . . . . . . . . . . 211
Transfer Tacit Knowledge to Explicit Knowledge - and Back . . . . . . . . . . . . . . . 212
Tacit Knowledge
Explicit Knowledge
Problems of Implicit Knowledge
Tacit-to-Explicit Knowledge Flow
Explicit-to-Tacit Knowledge Flow
Explicit-to-Explicit Knowledge Flow
Tacit-to-Tacit Knowledge Flow
THE EFFICIENCY OF LEARNING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
Improving Learning Efficiency
The Knowledge Spiral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216
Be Flexible and Versatile! -- Transfer Skills from One Application Area to Another . . . . . . . . .218
Pool Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219
Perspectives on Selected Knowledge-Building Practices and Learning Issues . . . . . 221
PEOPLE RESIST LEARNING WHEN COSTS EXCEED BENEFITS . . . . . . . . . . . . . . . . . . . 221
KNOWLEDGE CHANGES OUR BEHAVIOR! . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221
Empower People by Helping Them Understand the Organization’s Direction
DON’T BELIEVE YOU SAVE MONEY AND TIME THROUGH IN-HOUSE BOTTOM-UP LEARNING! --
INSTEAD, IMPORT KNOWLEDGE AND USE OUTSIDE EXPERTISE . . . . . . . . . . . . . . . . 222
EDUCATE, DON’T ONLY TRAIN IF YOU WANT INTELLIGENT-ACTING PEOPLE AND ORGANIZATIONS! . . . . . . . 223
Training Often Has Drawbacks When Contrasted with Education
Special Aspects of the Learning Organization . . . . . . . . . . . . . . . . . . . . . . . 225
KNOWLEDGE FLOWS IN THE LEARNING ORGANIZATION . . . . . . . . . . . . . . . . . . . . . 225
PERSPECTIVES ON CORPORATE RELEARNING . . . . . . . . . . . . . . . . . . . . . . . . . . 226
LEARNING, INNOVATION, AND CORPORATE CULTURE . . . . . . . . . . . . . . . . . . . . . . 227
The Negative Side
The Positive Side
EXPERTS WHO DON’T LEARN BECOME OUTDATED . . . . . . . . . . . . . . . . . . . . . . . . 228
EXPERTS’ PERSPECTIVE ON THEIR ROLE AND FUTURE . . . . . . . . . . . . . . . . . . . . . . 230
UNDEREDUCATION AND OVEREDUCATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231
Contents vii

Page
Chapter 7. Thinking and Reasoning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
This Chapter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
Thinking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234
THINKING, REASONING, AND KNOWLEDGE . . . . . . . . . . . . . . . . . . . . . . . . . . . 234
Intuition
WHAT DIRECTS OUR THINKING? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237
We Avoid Pain and Seek Pleasure
Reasoning Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238
COMMONSENSE REASONING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239
DEDUCTIVE REASONING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240
INDUCTIVE REASONING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242
ABDUCTIVE REASONING -- CREATIVE PEOPLE USE IT TO GET BETTER INSIGHTS FAST! . . . . . .. 243
ANALOGICAL REASONING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245
ASSOCIATIVE REASONING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245
REASONING WITH PATTERNS -- PATTERN RECOGNITION . . . . . . . . . . . . . . . . . . . . 246
Metaphoric Reasoning
SPATIAL REASONING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247
REASONING WITH UNCERTAINTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 248
Reasoning about Risk
CASE-BASED REASONING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249
Good Conclusions Require a Wide Range of Reference Cases!
Case-Based Reasoning Is Valuable When Automated
MODEL-BASED REASONING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252
QUALITATIVE OR APPROXIMATE REASONING . . . . . . . . . . . . . . . . . . . . . . . . . . 253
Qualitative Reasoning
Fuzzy Reasoning
How Do We Cope with Complex Reasoning Situations? . . . . . . . . . . . . . . . . . . . 256
Simplifying May Not Always Be Better!
DOMINANT-HYPOTHESIS REASONING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258
MOST-IMPORTANT FACTOR REASONING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259
Complex Reasoning Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259
TEMPORAL OR DYNAMIC REASONING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260
Reasoning with Causal Event Chains
NONMONOTONIC REASONING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 262
REASONING BY DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263
PLANNING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263
Directing a Dialog: A Special Kind of Planning Ahead
REASONING WITH MULTIPLE HYPOTHESES -- “BLACKBOARDS” . . . . . . . . . . . . . . . . . . 265
Highly Complex Reasoning Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . 266
We Often Use Special Tools to Support Complex Reasoning
Goal-Directed Reasoning, Proxy Beliefs, and Developing Judgments . . . . . . . . . . 268
REASONING AND SEARCHES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268
WE CREATE “PROXY BELIEFS” WITH OUR MENTAL MODELS . . . . . . . . . . . . . . . . . . . 269
On Developing Positive Judgments and Associations
On Negative Judgments
Creating Mental Models to Establish Associations
The Strength of Our Arguments Rests Directly on How Well Connected Our Knowledge Is
Some Observations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273
THE PSYCHOLOGICAL COSTS HAD BETTER BE BELOW BENEFITS! . . . . . . . . . . . . . . . . . 273
Is It Lethargy, Mental Laziness, or Cognitive Reluctance?
Chapter 8. Solve Problems! Make Decisions! -- Use Knowledge Creatively! . . . . . . . . 275
This Chapter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275
All the Knowledge In the World Is No Good If It Is Not Used . . . . . . . . . . . . . . . . 276
Outcome-Oriented Thinking and Outcome-Oriented Activities . . . . . . . . . . . . . 276
Outcome-Oriented Thinking and “Problem-Solving”
A GENERAL SCHEMA FOR OUTCOME-ORIENTED THINKING . . . . . . . . . . . . . . . . . . . 277
Our Beliefs and Biases Govern Our Problem-Solving and Decision-Making -- The Use of Proxy
Beliefs in Problem-Solving
ANALYSIS AND SYNTHESIS -- DIAGNOSIS AND DESIGN . . . . . . . . . . . . . . . . . . . . . . . 280
After Sub-Dividing to Understand the Details, We Need to Understand the Whole!
Daily Life Analysis
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Systematic Analysis
We Synthesize to Create New Options
EIGHT PARADIGMS FOR OUTCOME-ORIENTED THINKING . . . . . . . . . . . . . . . . . . . . 282
Leisurely or Unfocused Exploration -- “Give Some Thought to It”
Crisis Problem-Solving -- Avert Disaster
Routine Problem-Solving -- Perform Competent Knowledge Work!
Systematic Problem-Solving-- Find Quality Approaches to Special Challenges!
Decision-Making -- Generate, Select, and Implement an Approach to Handle the Challenge!
Evolutionary and Incremental Problem-Solving -- Let Me Tackle That Problem When I Get To It!
Exploratory Problem-Solving -- Find Out What Goes On and See If Anything Can -- or Should --
Be Done About It!
Innovating or Creative Exploration -- Make What You Are Doing Better!
Some Particular Aspects of Problem-Solving and Critical Thinking . . . . . . . . . . . 291
Running Decisions Are an Integral Part of Any Problem-Solving Process!
OTHER ASPECTS OF PROBLEM-SOLVING . . . . . . . . . . . . . . . . . . . . . . . . . . . 291
Representational Issues
Problem-Solving “Mini-Strategies”
SCRIPT FOR PERSONAL ON-THE-JOB PROBLEM-SOLVING . . . . . . . . . . . . . . . . . . . . . 293
SOME ASPECTS OF CRITICAL THINKING . . . . . . . . . . . . . . . . . . . . . . . . . .. . 296
Outcome-Oriented Work in Organizations . . . . . . . . . . . . . . . . . . . . . . . . . 297
MODES OF ORGANIZATIONAL OUTCOME-ORIENTED WORK . . . . . . . . . . . . . . . . . . . 297
BOTTOM-UP PROBLEM-SOLVING MAY BE FAR FROM GOOD . . . . . . . . . . . . . . . . . . . 297
IS TOP-DOWN PROBLEM-SOLVING BETTER? . . . . . . . . . . . . . . . . . . . . . . . . . . . 298
EFFECTIVE PROBLEM-SOLVING COMBINES DIFFERENT LEVELS OF THE ORGANIZATION AND
SEVERAL AREAS OF EXPERTISE . . . . . . . . . . . . . . . . . . . . 299
DIFFERENT APPROACHES TO OUTCOME-ORIENTED WORK . . . . . . . . . . . . . . . . . . . . 300
Knowledge-Intensive Work and Outcome-Oriented Activities . . . . . . . . . . . . . . 302
Reframe -- Change the Paradigm! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303
REFRAMING -- STAND BACK AND TAKE A NEW LOOK . . . . . . . . . . . . . . . . . . . . . . . 304
WHAT DO YOU NEED TO KNOW TO REFRAME EFFECTIVELY? . . . . . . . . . . . . . . . . . . . 306
The Wonder of Creativity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 308
There Are Distinguishable Creative Phases
REFRAME TO BE CREATIVE! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309
COMBINE KNOWN ENTITIES IN NEW WAYS! . . . . . . . . . . . . . . . . . . . . . . . . . . . 310
KNOWLEDGE BEGETS IDEAS AND IDEAS BEGETS CREATIVITY! . . . . . . . . . . . . . . . . . . . 311
What Is Decision-Making? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312
The Decision-Making Process
WHAT IS A QUALITY DECISION? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314
What Makes a Good Decision?
Decision-Making with Multiple Objectives
CHOICE SELECTION AND CREATIVE DECISION-MAKING . . . . . . . . . . . . . . . . . . . . . 317
Choice-Selection Decision-Making by “Passive Decision Makers”
Creative Decision-Making
Types of Decision Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319
IMPORTANCE AND COMPLEXITY OF DECISION CHALLENGES . . . . . . . . . . . . . . . . . . . 319
MINOR, MAJOR, AND POLICY DECISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 321
Minor Decisions
In the Aggregate, Minor Decisions Tend to Have Major Impacts!
Intermediate Decisions
Major Decisions
Policy Decisions
PROGRAMMED AND NONPROGRAMMED DECISIONS . . . . . . . . . . . . . . . . . . . . . . . 324
Programmed Decisions
Nonprogrammed Decisions
Decision-Making -- Strategies and Styles . . . . . . . . . . . . . . . . . . . . . . . . . . 325
TEN DECISION-MAKING STYLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325
Automatic Decisions -- Decisions by Rote
Snap, or “Seat-of-the-Pants” Decision-Making
Fixed-Idea Decision-Making
Arbitrary-Alternatives Decision-Making
Dominant-Factor Decision-Making
Dominant-Hypothesis Decision-Making
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Incremental “Muddling-Through” Decision-Making
Mixed-Scanning Decision-Making
Satisficing Decision-Making
Vigilant Decision-Making
Factors That Affect Decision-Making . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339
IS DECISION-MAKING RATIONAL? . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 339
FACTORS THAT AFFECT DECISION-MAKING NEGATIVELY . . . . . . . . . . . . . . . . . . . . . 339
Situational Factors
Cognitive Factors
Affiliative Factors
Egocentric or Self-Serving Factors
Don’t Fall Prey to Defensive Avoidance and Hypervigilant Escape!
FACTORS THAT FACILITATE DECISION-MAKING . . . . . . . . . . . . . . . . . . . . . . . .. 342
IT TAKES CONVICTION TO MAKE DECISIONS .. . . . . . . . . . . . . . . . . . . . . . . . . 342
REMEMBER: GOOD DECISIONS ARE CREATIVE! . . . . . . . . . . . . . . . . . . . . . . .. . 345
Situation Familiarity and Reframing
Level of Expertise and Quality of Knowledge Work . . . . . . . . . . . . . . . . . . . . . 347
EFFECTIVENESS OF DECISION-MAKING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347
Quality of Knowledge work Is a Function of Available Information
Give People Better Knowledge and They Will Solve Problems and Make Decisions Beyond Traditional
Bounds!
Perspectives on Some Decision-Making Practices and Issues . . . . . . . . . . . . . . . 351
A CONTRARIAN VIEW OF IMPORTANCE OF DECISIONS . . . . . . . . . . . . . . . . . . . . . . 351
THE PROS AND CONS OF “KISS” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 352
DECISIONS MUST BE IMPLEMENTED TO HAVE VALUE . . . . . . . . . . . . . . . . . . . . . . 352
The Hidden Costs of Making Decisions on the Wrong Level . . . . . . . . . . . . . . . . 353
Chapter 9. Team Work, Collaboration, and Related Knowledge Needs . . . . . . . . . . . 357
This Chapter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 357
Organizations Are Built On Networking . . . . . . . . . . . . . . . . . . . . . . . . . . . 358
Networking Takes Many Shapes
It Takes Networking to Handle Customer Requests
Team Work and Collaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 362
TEAMWORK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 362
Inter-Team Communication Modes Affect Knowledge Sharing!
Teams Must Have a Full Complement of Knowledge to Provide Quality!
A Simple Approach to Determine Knowledge Requirements for Teams
You Need Knowledge to Collaborate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365
CONDITIONS FOR COLLABORATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365
Collaboration by Equals
Collaboration by Complementing Professionals
COLLABORATION IN BUSINESS AND INDUSTRY . . . . . . . . . . . . . . . . . . . . . . . . . 369
The Self-Managed Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370
What Makes a Team Outstanding? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372
KNOWLEDGE PROMOTES THE TEAM’S DRIVING FORCE: ITS VISION, PASSION, AND CAPABILITY TO
CARRY IT OUT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372
A TEAM IS MORE THAN THE SUM OF ALL ITS COMPONENT PARTS -- IT PROVIDES SYNERGY! . . . . . . . 373
INDIVIDUAL WORK STYLES INFLUENCE TEAM WORK STYLES . . . . . . . . . . . . . . . . . . . 373
Part IV. A Knowledge Management Framework . . . . . . . . . . . . . . . . . . 375
Chapter 10. Practical Considerations for Managing Knowledge . . . . . . . . . . . . . . . 377
This Chapter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377
Pay More Attention to Knowledge! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378
We Need a Framework to Manage Knowledge . . . . . . . . . . . . . . . . . . . . . . . . 378
Why Do We Need a Framework?
THE FRAMEWORK RESTS ON THREE PILLARS . . . . . . . . . . . . . . . . . . . . . . . . . . 379
I. Explore the Knowledge and Its Adequacy
II. Find the Value of Knowledge
III. Manage Knowledge Actively
Some Knowledge Management Approaches -- Their Purpose and the Questions They Address . . . . 383
Broad, Top-Down Methods
General Knowledge Management Methods
General Technical Methods
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Page
Detailed Technical Methods
How Can We Use the Various Knowledge Management Methods . . . . . . . . . . . . 389
Practical Knowledge Management Experiences . . . . . . . . . . . . . . . . . . . . . . 391
Basic Reasons for Managing Knowledge
Patterns of Knowledge Management Practices
TECHNOLOGY-BASED APPROACHES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394
Knowledge-Based System (KBS) Approach
Integrated Intelligent Agent Approach
IMKA -- A Technical Knowledge Asset Management Approach
BROAD-BASED APPROACHES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396
Core Competencies Approach
Learning Organization Approach
Human Resource Management Approach
Knowledge Optimizing Approach
Universal Management of Knowledge Approach
Some Observations
A FINAL VIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401
APPENDICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402
A. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 403
B. Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410
INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 416
Acknowledgments
This book could not have been created without the help and support by many parties.
Primarily, it has been made possible by the unwavering support by my wife, Elisabeth, who
from her research provided me with many of the ideas expressed in this book and who taught
me much about how people think, reason, and differ depending on their make-up. And more
importantly, she taught me what love is, and how it relates to our human condition and
performance.
I owe much to my parents who taught me to be curious, to think, to understand that value
can only be realized after the task is completed, and that it is permissible to have fun.
My coworkers have helped me realize much of the complexity that real challenges present
and how to perceive and deal with them. Sue Stafford and Helen Ojha in particular pulled me
into the areas of philosophy and social sciences that I had never discovered and that have
direct bearing on the topics in this book. Many others have helped shape the insights that led
to perspectives on the practical role of knowledge. My managers during many years, David
Boodman and Martin Ernst, allowed me to attack challenges that “nobody should be paid to
work on” -- they were that fun, educational, and difficult.
Without my clients who continually have posed incredibly interesting and challenging
problems, I would have little understanding of the importance that knowledge plays in the
modern organization. The insights, concerns, and encouragement that my clients in many
industries, many settings, and six continents have provided me with over the years, have been
invaluable.
My editor, Kirsten McBride, provided invaluable help to make this book readable -- in
spite of my attempts to the opposite!

xi
xii Knowledge Management Foundations:
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Preface
The worldwide industrial and economic transformations that now take place have led to
significant upheavals for workers and professionals in nearly all fields. More critical than the
worker issues are the tremendous societal restructuring and changes that many perceive to be
permanent. The turmoil stem from several factors; greater pressures to increase product
quality and decrease costs; basic and frequent changes in business practices and in consumer
and high technology products; price wars in most segments of the world economy, and crucial
and often painful shifts in markets, policies, and economic structures caused by a worldwide
recession. Many of these changes and their underlying factors are discussed in depth by
Drucker who argues that we already have started a transition into the global “Knowledge
Society” -- although we do not yet understand what that entails, and probably will not really
have an overview of what is happening for some decades to come.*; These changes
have profound impacts on the complexity of the workplace, requiring higher levels of
knowledge and skills on the part of every individual who wishes to hold a responsible job and
every organization that wishes to be consistently successful.
Although we face enormous challenges in general education to prepare entrants to the job
market, the greatest challenge is to reeducate our current workforce. Given the rapid changes
and advances in most fields, skills and techniques learned more than a decade ago are
inadequate to compete in today’s job market. In the face of these challenges, the major
defense for organizations is to manage knowledge on a broad basis -- educate, build their
internal knowledge base, pool and deploy the knowledge they have, invest in development of
new and proprietary knowledge, and put their knowledge to use as effectively as possible.
This book is about a new set of foundations for management methods. Specifically, it is
about what knowledge is, and how business can use it, harness, enhance, and manage it so it is
of the best value to the organization.
The central premise behind knowledge management is that the factors that lead to superior
performance -- organizational creativity, operational effectiveness, and quality of products
and services -- are all improved when better knowledge is made available and used
competently where and when needed. This premise supports the management philosophies
and corporate cultures of highly successful companies but is in direct contrast with traditional
Taylorism.** Knowledge management complements and must be considered in combination

* Peter Drucker (1993), in his book Post-Capitalist Society provides extensive discussions of
the transition to a “knowledge society.”
** “Taylorism” refers to the operation and management practices advocated by “the father of
scientific management,” Frederick W. Taylor (1856-1915). A description of Taylorism
Preface xiii

with modern management methods such as Dr. Deming’s Total Quality Management.*** In
short, the knowledge management perspectives, approaches, and methods, help to promote
and enhance such practices as:
• Business process reengineering
• Enterprise-wide integrated operations
• Participative management with empowerment of all knowledge workers
• Total quality management and quality function deployment (QFD)
• Collaborative workstyles
• Supportive work environment and corporate culture
When considering the value of knowledge management, we need to define what we mean
by “knowledge,” particularly in contrast to “information.” To avoid misconceptions we must
differentiate between the two using an operational definition such as the following:
Knowledge consists of facts, truths, and beliefs, perspectives and concepts, judgments and
expectations, methodologies and know-how.
Knowledge is accumulated and integrated and held over longer periods to be
available to be applied to handle specific situations and problems.
Information consists of facts and data that are organized to describe a particular situation
or condition.
Knowledge is subsequently applied to interpret the available information about a
particular situation and to decide how to manage it. We use knowledge to determine
what the situation or condition means.
Knowledge management programs provide the organization with powerful processes that
allow its managers to use innovative ways to support their pursuit of leadership. By sharing
some of the perspectives and approaches that have been useful, we hope that this book will
generate visions for new ways of doing business based on different uses of knowledge.
The book is partially motivated by the concern that knowledge and expertise are not
recognized as directly manageable assets in most U.S. companies. Most managers express
that they do not know how to characterize, appraise, or manage knowledge explicitly and
actively even though we are becoming a knowledge-based, postindustrial society where

may be found in Craig Littler, “Understanding Taylorism,” in British Journal of Sociology

29 (1978, pp. 185-207). Taylor, and Western practitioners of “Rational Approach to
Management” which were nearly all companies, are argued to have promoted the view that
workers should be told explicitly what to do and not be encouraged to use their own
knowledge and ideas to change or improve work practices or work process. According to
that view, workers who improve these areas on their own are counterproductive and such
worker involvements should be discouraged.
According to Drucker (1993) this is a totally inappropriate interpretation of Taylor’s
personal work and philosophy. Taylor actually promoted worker participation and
ownership -- directions that were threatening to both management and labor at the time and
he was vilified and intentionally misinterpreted -- resulting in the general
misunderstanding.
*** Dr. Deming’s management method is described very readably by Walton (1986), and in

greater detail by Deming (1986).

xiv Knowledge Management Foundations:
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knowledge and expertise play a more important role than ever before. This concern was
strongly substantiated by a small survey that I undertook of chief executives of Fortune 50
companies in 1989.
The topic of knowledge management has generated considerable interest among the
executives and professionals that we work with. First, as many have commented, the area is
vast. Second, the topic is of critical importance to the future of all companies. Finally, the
treatment provided in this book represents the tip of the iceberg and is only one perspective of
what we need to know about the topic. Hopefully it will be revised again and again by
practitioners from all over.
Major questions confront any manager who introduces new management methods or
advocates change. Introduction of knowledge management is no different. Some of the
questions that must be addressed are:
• What is knowledge management all about?
• Is it worth for me to consider knowledge management at this time?
• Which business advantages might we realize from active knowledge management?
• Which experiences have others had, and where should we start?
• What are the risks and pitfalls?
• How do we determine the value of knowledge management, and how do I justify it?
• Which framework exists for knowledge management and which paradigm can I adopt
to “wrap my arms” around this concept and for important knowledge situations that
require my attention?
• Which knowledge management approaches and methodologies are available, and how
practical are they?
• How does knowledge management relate to existing programs and management
activities? How does it differ from, and complement, what we are doing already?
• What are expert systems and how do they support knowledge management?
These are complex issues but hopefully the treatment will be of help to the manager who
wants to win in the competitive game and to do so with confidence and decisiveness, and
avoid wasteful pitfalls along the way.
This book is intended for managers who want to build, not dismantle. It is not for
managers who manage with short-term “cash-cow” attitudes in a hand-to-mouth existence.
The concepts presented are for managers who work to build the strength of the organization to
excel for a longer time in the global business environment. It is for managers who want to
change the organization by improving its processes and letting its people work smarter and by
exploiting the organization’s strengths without depleting its resources.
This book is the result of varied experiences, with the last 23 years in management
consulting. In the 1960s I had the opportunity to work with applied research and application
of technology to areas where competitive knowledge was very important and where
knowledge transfer and its management were keys to success. Later, I was fortunate to work
with many clients who needed to manage knowledge -- as we now understand it -- for using
and evaluating knowledge, intellectual strategies, technology, and transfer of technology,
Preface xv

skills, and expertise. The engagements occurred in many countries and for many purposes,
and included automation of human expertise in knowledge-based systems of many types.
In the 1970s, I was asked to help large organizations and governmental agencies develop
approaches to achieve their objectives. These engagements ranged from business and policy
analyses, strategizing, creation of manual and automated planning systems, to development of
executive information and decision support systems. During the beginning of the 1980s, my
work largely focused on the application of artificial intelligence -- often with motivations that
were extensions of conventional systems thinking.
Around 1985, it became apparent that we approached application of artificial intelligence
much too narrowly. We were automating small and relatively simple aspects of human
reasoning in isolated business situations. It was clear that a broader perspective was needed.
We needed to consider how knowledge should be managed across the whole organization. In
1986 the thinking in my group at Arthur D. Little had progressed to the point that we went
public with our concepts.**** Since then, my associates and I have had many opportunities to
help clients organize and carry out their knowledge management programs. It is the
perspectives derived from these experiences and the corresponding research that I have
attempted to share in this book.

**** My first presentation on knowledge management was called Management of

Knowledge: Perspectives of a new opportunity to a 1986 conference sponsored by the
United Nations’ International Labour Office. That presentation was later published (Wiig,
1988).
Part I
The Role of Knowledge
in Business
Knowledge is increasingly recognized to underlie the success of all enterprises. It is the
agent that generates visions, the ingredient that drives people’s reasoning, and the capability
that leads to intelligent-acting behavior. Knowledge is the factor that creates value for the
organization and it is judged to be the most valuable asset that an organization has. The
essence of knowledge may be to provide the answers to: “What does it mean?”
In order to derive the best value from knowledge -- to ensure the best success for our
organization -- we need to manage it. To make us able to manage knowledge, we need to
know “enough” about it and all the relevant aspects that pertain to identify its present state,
handle any problems, envision and create knowledge-related opportunities, and make the
required changes that will bring about the desired results.
In our work over the last decades with knowledge-related activities and the people who
are concerned with them, we have found that there is inadequate understanding of what
knowledge is, how it is used, and how it can be managed. Chief executive officers indicate
that they very much would like to manage knowledge -- but do not know how. Knowledge
professionals -- often recruited from other areas such as information sciences -- try to do the
best they can but need additional insights before they understand what knowledge is, how it is
used, and what can be done to improve present situations and practices.
When analyzing the work of novice, and even some seasoned, knowledge professionals,
for example, it is remarkable to observe that they often focus only on “factual” aspect of
knowledge such as: “What do you know about market conditions? Products? Who do you go
to for help?” Only the more experienced knowledge professionals who are given deeper
understanding of how knowledge is used by people and organizations have the additional
insights to focus on the knowledge needed to use factual knowledge -- i.e. knowing what to
do and how to do it. In addition to factual knowledge they also understand to focus on
knowledge required to reason and perform knowledge-intensive activities proficiently. Even
2 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

though factual knowledge is very important, it is reasoning and methodological knowledge

that creates value for the organization by making it possible to build quality products and
deliver quality services.
Typically, in knowledge-intensive work, we find that each work task consists of more
hidden activities than observable ones. That places considerable demands on the knowledge
professional who must have the expertise to analyze and discriminate what transpires in the
situation to uncover the activities that take place. Their expertise must include good
understanding of knowledge-intensive work as well as understanding of what the knowledge
worker is attempting to achieve within the business process. Without that understanding and
practiced expertise, the analyst will be forced to focus on the observable activities with
discovery of hidden activities only by serendipity.
It has been interesting to observe seasoned managers’ discovery of the value of knowledge
management. In several instances, their initial reactions were: “We have a very good handle
on what we need to know and how the competence of our professionals matches the
requirements.” After brief efforts to identify and characterize the various knowledge areas
required to perform quality work for tasks they knew well, they discovered that they had
never been explicit about the requirements and once the details were out on the table, they
obtained totally new perspectives. In such instances, the new insights have lead to radically
new team compositions and educational programs for present staff to make them capable to
be more flexible and perform higher quality work -- with less effort and greater satisfaction!
Managing knowledge is not simple. First, it affects almost all aspects of the organization
and their effectiveness. That, however, is also the reason for why it is so important to manage
knowledge! Second, it requires new insights and perspectives that most of us have not had
previous opportunity to become familiar with. Unfortunately, unless we obtain some of this
understanding, we will not be able to manage knowledge very effectively.
This book is intended to provide some of the basic understanding of the aspects of
knowledge that business professionals need to deal concertedly and systematically with
knowledge -- to manage it, analyze it, and to optimize its value to their organizations.
Chapter 1
Knowledge Management:
An Introduction

This Chapter
This chapter introduces the notion of “doing more with less” and the increasing pressure
to progress that organizations of all kinds now encounter, requiring greater intelligence-acting
and proficiency. In line with that notion, several characteristics that improve with increasing
knowledge are presented to provide an initial understanding of why knowledge management
(KM) is important. An interesting set of perspectives on knowledge and its importance as
expressed by several Fortune 500 chief executives are also discussed briefly.
Three themes behind KM are emphasized:
1. Knowledge is the foundation of all aspects of the enterprise
2. Leveraging knowledge through vigilant KM is required to make the enterprise act
intelligently
3. The best knowledge must be made available and embedded in all products and services to
maximize value to customers
The nature of KM is discussed briefly with the introduction of different forms of knowledge,
the many purposes for its use, and the specific categorization of four conceptual knowledge
levels.
The issue of why one should be concerned about managing knowledge is discussed and
supported by three example cases. That is followed by an introduction of what KM is as
defined for eight activity areas. Practical management of knowledge requires specific
approaches, and a framework of practical methods is introduced as the “three pillars of KM.”
The issue of how much an organization needs to know about knowledge to manage it
effectively is also introduced.
Since our world is gradually changing towards higher value-added work -- knowledge
work -- the issue of changes in our business environments is introduced along with the
concept that knowledge can be managed effectively. In this context, four key areas of KM are
indicated: knowledge assets; knowledge activities; organization’s purpose and directions; and
capabilities to use knowledge effectively. Selected relations of these areas are also described.
Managing knowledge requires new methods and perspectives and some of these are

3
4 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

introduced to open the way for later discussions in this and other volumes. The chapter closes
with a brief discussion of some applications of KM to illustrate what is possible with the
present state of understanding and development.

Setting the Stage

Many organizations are becoming increasingly concerned with organizational knowledge
and their use of knowledge to create and make quality products, deliver quality services, and
to maximize the efficiency of their internal operations.
Much professional focus on knowledge in business has been channeled towards creating
knowledge-based systems such as expert systems for critical knowledge functions. However,
that focus, important as it is, is increasingly found to be much too narrow. Managers at all
levels -- in Europe and Japan as well as in the United States -- are starting to realize that
knowledge in the form of expertise, competence, and technology, and in other manifestations,
is the organization’s most important asset and that its quality and availability affect all aspects
of the organization. Corporate strategy, decision-making, all types of knowledge work, and
even creation of new products that build upon prior ones are all affected by the level of
knowledge that can be applied to create new and better solutions. More and more executives,
managers, and professionals realize that in the modern organization, all valuable work is
centered around knowledge-intensive activities and the organization’s success is directly
related to the quality and relevance of these activities, particularly through knowledge
workers’ expertise and their willingness to use that expertise to their employers’ advantage.
There still is considerable confusion about what knowledge is and the difference between
knowledge and information. This is exemplified by a recent quote from Business Week
where the author equates information and knowledge in the following way:
“Once the work has been redefined, the new information technology plays a key
role. “User-Friendly” software, personal computer networks, hand-held wireless
terminals, and other gadgets are used to move information to the front lines -- to
give the folks on the factory floor or in the customer service department the
knowledge they need to act quickly.” Business Week, June 14, 1993 #3323 p. 57.

As illustrated in Figure 1-1 where a customer phones in to a service representative, there

are fundamental differences between knowledge and information. In this illustration, the
customer provides information about his account and the service representative obtains
additional information about the account from the in-house information system. The service
representative holds knowledge that allows him to work with the customer. Information,
then, is specific and particular to, and defines a specific situation, while knowledge is general,
held to handle many situations: it may be concrete or abstract and is often semi-permanent.
Knowledge Management: 5
An Introduction

Figure 1-1. Information Provides the Specifics about the Situation. Knowledge Is Used
to Work, Interpret, and Manage It.
Customer Service Represenative

Database

How to operate workstation

"I have an account How to talk to customer Account Holder.
with you. Its How to verify that caller is Password.
number is 457. authorized person Type of account.
What is my How to interpret request Restrictions.
balance?" How to interpret data Account balance.
How to explain to customer
Information Information
Knowledge

Do More with Less! -- Use Knowledge!

Increased competitiveness, leaner organizations, improved quality, more favorable
profitability, better standard of living, higher productivity, higher GNP per capita -- in other
words: progress through better performance -- all depend on being able to do more, do it
better, and preferably with fewer resources and often with fewer people. These are difficult
challenges, and we normally accept that in order to achieve this tall order we need constant
innovation, through incremental daily improvements as well as comprehensive
“revolutionary” changes. Instead of working harder, we would like to achieve progress by
working smarter -- as individuals and as organizations. In particular, we would like to act
more intelligently.
There are many ways in which we can work smarter and act more intelligently. We can
make better decisions to avoid costly errors and chose more favorable courses of action. We
can make quicker decisions to save ourselves and our customers time and money. We can
collaborate with other departments, suppliers, and customers to improve the quality of our
knowledge work and create better product designs in shorter time. We can reengineer and
streamline our operations to implement totally new ways of operating or to cut costs and time.
We can provide better information to prevent misinformed work. We can improve the nature
of our products and services to make them more valuable. We can leverage ourselves by
using automation. All these, and most other ways to work smart and intelligently depend
6 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

directly on people having very good personal knowledge as well as access to expert and
institutional knowledge.
Enabling people and organizations to do more with less and do it better than before is the
challenge we all face in our struggle to improve. Organizations downsize, individuals are
given greater responsibilities, we all seek to increase the value of our work to justify our quest
for compensations that can maintain or improve our standard of living. The key to our
success is the knowledge we bring and our ability to use it to greatest advantage. Effective
management of knowledge, on the personal and the organizational level, to create, build, and
leverage knowledge is the central challenge.
A second challenge is associated with managing knowledge. That deals with the need to
embed the best conceivable knowledge in products and services to make them as valuable as
possible to customers. The goal is not only to increase demands for our offerings but also to
increase their capabilities and quality of life.

What Is Important? The More You Know, the Easier It Is to

Learn and to Provide Quality Work!
For some very important reasons, organizations should provide their personnel with better
knowledge and insights into what knowledge is and give them better understanding of
thinking about thinking. These capabilities help individuals and organizations alike. They
lead to improved learning and ability to stay ahead of competition and changes in the world.
They lead to better problem-solving and decision-making. They lead to more innovation and
greater creativity. They lead to higher quality knowledge work. They lead to improved
knowledge embedded in products and services. They lead to more effective networking and
collaboration. They lead to greater vigilance and energetic behavior. And -- often they even
lead to better ethical behavior.
All these characteristics are critical for organizations to be durable leaders and provide
exceptional value to their owners, excellent products and services, and highly rewarding and
productive work environments for their employees. We use these capabilities to improve four
of the critical success factors for the organization: (a) act intelligently by working smart and
being versatile and flexible; (b) collaborate and network; (c) be vigilant and energetic; and (d)
be ethical.
Greater knowledge and understanding of thinking about thinking lead to:
• Improved learning by providing insights into effective and attractive methods and options
for acquiring and creating new knowledge, how to organize such knowledge, and which
knowledge areas might be pursued with greatest return.
• Greater ability to stay ahead of competition and changes in the world through increased
understanding of market and world changes and improved ability to acquire or develop
new knowledge.
Knowledge Management: 7
An Introduction

• Better problem-solving and decision-making by providing better methods and more

suitable knowledge to apply to problems, by understanding implications better, and by
working closer with others in the organization.
• Higher quality knowledge work by providing better organized knowledge, greater
expertise and ability to deal with non-routine conditions, and by collaborating and finding
other ways of pooling knowledge.
• More innovation and greater creativity by providing improved understanding of situations
and greater knowledge of methods to be creative and innovative.
• Improved knowledge embedded in products and services by providing a greater body of
knowledge to draw from, greater expertise in how to embed and deliver knowledge, and
greater understanding of which knowledge is important to include.
• More effective networking and collaboration by providing individuals with better
approaches to work on teams, greater understanding of other people, insights into what
others can contribute and how to integrate their contributions, and the value to the overall
outcome by including broader insights and expertise.
• Vigilance and energetic behavior by providing better understanding of available options
and the value of pursuing these options. They also reduce the psychological costs
associated with uncertainties of application of methods.
• Ethical behavior by providing deeper insights into the consequences of actions and more
congruent and consistent beliefs and values.
A major issue that all managers seem to struggle with is: “What should my people know
to be able to do a better job?” This question concerns the subject areas that different
individuals need proficiency in. Equally -- or perhaps more -- important are: (a) How well
should they understand each knowledge area? and (b) How much general understanding and
how much practical and detailed understanding should they have? The latter point is
important since it addresses the degree to which each individual will be able to deal with non-
routine situations and have the added insight to be innovative. It also addresses the point of
how well the individual will be able to walk into a situation and immediately perform useful,
practical work.
This book attempts to provide some understanding of a number of these issues, often from
a general and scientific/abstract perspective, to establish a firm foundation for active efforts to
manage knowledge to achieve better knowledge and knowledge insights. It has become clear
that knowledge can -- and must -- be managed explicitly and deliberately to obtain the desired
results and organizational performance. With the traditional benign neglect of knowledge,
any organization begs for its competitors to take over -- be they European, Japanese, or next
door.
8 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

The Value of Knowledge

-- A Beginning Perspective --
When asked, American executives indicate that their company’s most important asset is
the knowledge held by their people. At the same time, however, they admit that they do not
know how to manage this asset properly. Furthermore, they say that more effective
management of knowledge within their firms is highly important and that active and explicit
KM is a requirement to remain competitive in the 1990s and beyond.
These executives also note that they consider the issue of handling knowledge to be very
abstract and complex and that they have problems “wrapping their arms around it.” But they
also indicate that once they see good and practical guidelines, they will be ready to adopt KM
approaches and devote the necessary resources to obtain whatever business advantages may
be possible. Already a few highly advanced firms have started to work actively on how to
manage knowledge. Some have teamed with other companies to form collaborative consortia
to develop proprietary ways to manage knowledge.
It is clear that managers and professionals must be provided with relevant understanding
of knowledge, how it is used in the business and operation of any enterprise, and how it can
be organized and managed to improve how we work and, thereby, the enterprise’s
performance. We need a coherent and practical framework for KM for it to be useful within
the high-pressure environments of the modern enterprise. This book presents emerging
practical experiences with managing knowledge that have proven useful in the hands of
progressive managers who work to make their organizations act more intelligently as
discussed in greater detail in the next chapter.1

THREE THEMES OF KNOWLEDGE MANAGEMENT

Knowledge Is the Foundation of the Whole Enterprise

There are three major themes behind the concept of KM. The first theme is: Knowledge is
the foundation of all functions and aspects of the enterprise. Without its knowledge, an
enterprise could not continue to operate and exist. Its organization and management
structures, traditions and culture, technology and operations, systems and procedures, and the
quality of its services and products are all based on and embed the enterprise’s knowledge and
expertise. As indicated in Figure 1-2, “Knowledge and expertise underlie the success of your
enterprise!” Continually, there are opportunities to learn how to improve knowledge -- and
with it, the way it performs -- from internal and external information feedbacks.
1 The purpose of knowledge management is to foster and promote intelligent behavior of
the organization. Intelligent behavior requires individuals and organizations to be: [1] are
well prepared; [2] choose appropriate postures; [3] provide excellent problem solving; and [4]
make outstanding decisions.
Knowledge Management: 9
An Introduction

Knowledge Management Must Make the Enterprise Intelligent-Acting

The second theme is: Knowledge management’s purpose is to make the enterprise
intelligent-acting -- to innovate, to make creative and sound decisions, and to produce high
quality knowledge work continually at all levels thereby create and deliver more valuable
products and services and improve the organization’s overall effectiveness. The nature of
KM is to build and leverage knowledge -- to facilitate the creation, cumulation, deployment,
and use of quality knowledge. It is of the greatest importance to the modern, progressive
enterprise that all its knowledge be of the highest quality and that only the best knowledge is
made available to all levels and as close to the function where it will be used and can have the
greatest impact.
Figure 1-2. Knowledge and Expertise Are Behind the Success of Your Enterprise!
Market Place &
Competitors

Customers
& Their
Reactions

Delivered Services and Products

Quality of Quality of
Services Products

Operation & Production

Systems & Procedures

Definitions of
Organization Products & Services
& Management
Structure

Technology
Traditions R&D
&
Culture

Learn
Knowledge & Expertise Codify
in People, Artifacts, Knowledge Bases Organize
Accumulate
Experiences
10 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

The Best Knowledge Must Be Embedded Into All Products and Services

The third theme is: Embed knowledge -- in all applicable manifestations -- into all the
enterprise’s products and services. The value to customers of an enterprise’s products and
services is directly related to the quality of knowledge embedded within them. Excellent
knowledge may be manifested as superb product technology or in creative designs that make
the products easy to use. It may also be embedded in services as relevant expert customer
support and advice that reduces customer costs and increases value.
Important as management of knowledge is, we do recognize that there are other important
aspects that executives must pay attention to, including the company’s finances, customer and
supplier relations, the loyalty and happiness of employees, effectiveness of operations, and
visions and plans for the future. KM becomes an additional area that needs to be included.
To be of real value, it has to be incorporated using efficient and systematic methods. Besides,
it must be implemented with care to ensure it does not become a burden rather than a vital
benefit.
One fundamental management function is to coordinate people to realize the best use of
their knowledge. Enterprises expend substantial resources to train people and codify
knowledge in manuals, training programs, and a wide variety of on-the-job education and
other activities. In short, KM has been a direct, if not explicitly stated, focus for managers for
a long time.
However, the lack of framework for managing knowledge on a broad and relevant basis
has been a problem for managers. That is, they have not had ways of “thinking about
thinking” with practical directions for how to deal with all the required knowledge-related
aspects and supported by practical methods. Many indicate that it is particularly difficult to
obtain overview of where their attentions are required -- not to speak about how they should
set priorities among the critical knowledge areas that they already know about.

Knowledge Assets Appear in Many Forms That We Use for Different Purposes

For most purposes, knowledge has been accumulated in either of two ways. Highly
refined knowledge, consisting of descriptions of facts, concepts, judgments, and relations
between “knowledge chunks” has been expressed in books and on paper as explicit
knowledge. Tacit knowledge on the other hand, consists of complex, diffuse, and mostly
unrefined knowledge accumulated as know-how and understanding in the minds of
knowledgeable people.
Book knowledge, by its nature, is passive, while knowledge in people is active when we
reason or use it to interact with people or respond to situations. In addition, we have recently
seen the emergence of computerized knowledge-based systems that contain small amounts of
codified knowledge. This type of knowledge is structured differently from book knowledge,
making it possible to perform simple reasoning automatically to infer conclusions about well-
Knowledge Management: 11
An Introduction

defined situations, to provide advice to knowledge workers and, in an increasing number of

instances, to handle situations without human interaction. In other words, we start to see the
emergence of advanced approaches for dealing with knowledge beyond the conventional
means that have been at our disposal.

We Hold and Use Our Knowledge in Many Ways

We may ask: “What do you have to know, and how do you need to know it, to make
decisions and do your work?” These issues are separable. What we have to know is a direct
function of the tasks we are asked to perform. How we need to know it pertains more to the
workstyle we wish to adopt to use our knowledge. Do we wish to reason explicitly and
vigilantly with it? Do we wish to make quick decisions based on well developed judgments?
Do we need to handle the situations automatically without discernible decisions as part of our
normal workflow? There are many options for how we wish to use the knowledge. In
addition, the workstyle we are able to adopt is a function of how well our knowledge is
developed.
From a cognitive perspective, we use knowledge on four conceptual levels. For example,
we use selected, often partly understood knowledge to represent the extreme in ideals and
sophisticated concepts to form our goals and beliefs and justify why we proceed in particular
directions. We use other knowledge that may be more theoretical and systematic, and often
better understood, to guide our insight into specific approaches that must be followed to
achieve our goals. We use explicit knowledge that pertains directly to the tasks we perform
to reason with and make deliberate decisions based on “how things work.” And we have
some knowledge that we are so familiar with that we have automated it and are able to use it
without thinking. Accordingly, we use knowledge on four conceptual levels:
1. GOAL-SETTING OR IDEALISTIC Knowledge -- Vision, Goal, and Paradigm
Knowledge. Part of this knowledge is well known to us and explicit -- we work
consciously with it. However, most of it is not well known, it is tacit -- and only
accessible nonconsciously. We use this knowledge to identify what is possible and to
create our goals and values. (“Knowledge WHY”)
2. SYSTEMATIC Knowledge -- System, Schema, and Reference Methodology
Knowledge. Our theoretical knowledge of underlying systems, general principles, and
problem-solving strategies to approach situations is to a large extent explicit and well
known to us. We use this knowledge to analyze and reason in-depth and to synthesize
new approaches and alternatives. (“Knowledge THAT”)
3. PRAGMATIC Knowledge -- Decision-Making and Factual Knowledge. Decision-
Making knowledge is “practical” and mostly explicit. We use this knowledge to perform
our daily work and to make explicit decisions. (“Knowledge HOW”)
4. AUTOMATIC Knowledge -- Automated Working Knowledge. We are so familiar with
this knowledge that we have automated it -- most has become tacit. We use it to perform
tasks automatically -- without conscious reasoning.
All of use idealistic knowledge to generate ideas and understanding of what is possible,
12 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

what we should strive for, and thereby obtain conviction that it is feasible and achievable. We
use systematic knowledge to give us the basic understanding of how things work and how to
proceed. Such knowledge allows us to map out the strategies, tactics, and specific programs
that enable us to pursue our goals. We use pragmatic knowledge to provide us on an ongoing
basis with judgments and insights to execute the daily implementation of our plans -- to
manage, coordinate, and control the implementation of projects. And we use our automatic
knowledge to make the minute decisions and perform the detailed knowledge work from
minute to minute that proper implementation requires.
These are some of the many aspects of knowledge that we need to be cognizant of to be
able to manage these resources -- to build them, deploy them, and ascertain that they are used
to the enterprise’s best advantage. As indicated by the four conceptual knowledge levels,
there are many aspects of knowledge that allow us to identify how we can make our
employees more valuable knowledge workers by giving them broader horizons and deeper
and more flexible knowledge.

Why Should I Be Concerned about Knowledge

Management?
Many executives ask this very valid question. From one perspective, KM is a new
concept with unproved approaches. Therefore, it might be proper to wait until additional
experiences and many applications have been reported before investing valuable personal
time and company resources.
From another perspective, knowledge is the most valuable asset of the enterprise and its
active and well coordinated management is long overdue. In addition, with our entry into the
“Global Knowledge Society” where knowledge more than ever provides the competitive
edge, KM is considered by many to be critical to company survival and competitive position.
In addition, it takes considerable time, several years before a broad KM program can be made
operational. Therefore, if two years from now, KM is judged to be of immediate importance,
it may be too late to start since more progressive competitors will already have obtained an
unreachable head start.1
It may be helpful to review some of the motivations, approaches, and experiences reported
by enterprises what have pursued KM actively. As can be seen from the following examples,
from Table 1-2 as well as from examples throughout this book, the applications areas are
quite diverse and the approaches can vary widely.2

1 Stewart (1991) provides a number of examples of companies that consider “Brainpower”

management to be of utmost competitive importance.
2 Such examples provided here were considered to provide important competitive advantages,

we were not able to name companies involved. Nor were we permitted to describe the
Knowledge Management: 13
An Introduction

EXAMPLE: FIND AND MANAGE THE MOST IMPORTANT KNOWLEDGE AREAS

The executive management of a large, high-technology engineering and manufacturing

organization realized that the major value-added contributions to their products were
derived from on their employees’ knowledge and expertise. The company’s technology
could be viewed as manifestations of part of this knowledge and continued to increase in
value as more of the employees’ expertise was incorporated.
The company’s role was as marketer, designer, specifier of components to be
manufactured by others, and as assembler and integrator of final products. Realizing this
situation, executive management was interested in gaining an overview of critical
knowledge throughout its organization in order to find the major knowledge areas that
should receive management attention and should be strengthened to maintain the
company’s advanced competitive position.
A small and highly competent multidisciplinary task force was assembled to survey
knowledge and its use throughout the organization. The members had advanced degrees
in technology, management, psychology, and philosophy and most were long-term
employees of the company and well acquainted with all its operations. Information was
gathered through several hundred comprehensive interviews with senior and middle
managers over a period of one year. The main objective was to find the most important
“Critical Knowledge Functions” and best competitive knowledge and relate them to the
way business should be conducted in the future. Another objective was to determine
potential management actions that would improve these situations. Scenarios were
assembled of how the world could be expected to evolve and how business could be
conducted in the future.
A large number of highly valuable areas of expertise were identified in individuals and
teams and many critical knowledge functions were described. The areas of competitive
expertise were analyzed further to ascertain that they would play a role in the
corporation’s strategy and that appropriate plans for continued building were in effect.
Six general areas were found to be of enough importance to require top management’s
attention. Additionally, many situations requiring middle management attention were
also identified and outlined. The six areas were:
• Product design knowledge - particularly, the knowledge associated with practical
application of advanced theory to final products so these products would perform
exceptionally well in the field in both the short and long terms.
• Subcontract procurement knowledge - in the areas of finding and developing competent
contractors, and working with them to modify design specifications within allowable
limits to obtain products with acceptable quality that could be produced in minimum
time and at reasonable costs.
• Manufacturing coordination knowledge - to help manufacturing with early discovery
and correction of potential production problems and to translate design specifications
and requirements into manufacturable designs.
• General personnel management skills - in all levels of management to foster better esprit
de corps and improved identification of up-and-coming technical and business leaders.

situations or experiences with precision. To camouflage the examples, we have therefore hid-
den the identity of the companies and altered the precise nature of the situations.
14 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

• Information systems and computer sciences application expertise - in both management

information system (MIS) staff and user organizations to better conceptualize
information technology uses to support business and technical operations and to help
change the way of doing business.
• Overall technical knowledge - in professionals and labor, both on the theoretical and
applied levels, with particular emphasis on understanding technology in addition to
obtaining in technology-use skills. Breadth of knowledge was also considered to foster
flexibility and understanding of the tasks and problems of “adjacent” functions.
Based on the results of this survey, the company embarked on a focused program to
improve knowledge in the six areas through formal education, internal courses,
apprenticeships, and other modes of building skills, understanding, and expertise in
relevant personnel. Top management created special budgets for this purpose and is now
monitoring improvements and conditions on a regular basis.
In addition to identifying the most important critical knowledge areas, the team also
explored ways to implement knowledge-based systems throughout the organization. It
had collected sufficient information to allow an initial description of the system
candidates and their potential benefits. This preparation allowed senior management to
rank the candidates and set priorities for implementation of systems and to create a
knowledge-based system development program.
The program has now been underway for several years. In addition to top management’s
involvement with the six major knowledge areas, a large number of knowledge-based
systems have been implemented and are in full operation with considerable economic and
non-economic benefits.

EXAMPLE: CONDUCT STRATEGIC KNOWLEDGE AUDIT TO CHANGE

CORPORATE STRUCTURE AND DIRECTION

The top management of a large process company became aware that they are a
“knowledge-based” company and that their major competitive advantage was the
knowledge and expertise their people possess. They had never gained a good overview of
knowledge assets and shortages within their enterprise and decided to conduct a
comprehensive knowledge audit to set the stage for wide-ranging changes. A broad study
was undertaken to survey and describe the condition of knowledge and relate it both to
business and competitive situations in different areas and to its technology developments
and opportunities. Knowledge was characterized in quite general terms, but coverage
went into enough detail to describe knowledge use, business functions, and company
operations. Several hundred operations and product lines were investigated and
additional knowledge-intensive functions were analyzed.
Top management was surprised by the findings. In key areas of work, there were
mismatches between those who possessed the knowledge required to get the job done and
those whose function it was to do the job. Besides, people’s work contacts and their
reporting relations were at odds with the required knowledge flows and with professional
groupings that supported the most important areas of knowledge work.
It was also discovered that many pieces of key knowledge that would have significant
competitive impact were missing. These gaps had never been brought to management’s
attention, and in many cases it was not clear that anyone was aware of the situation;
Knowledge Management: 15
An Introduction

furthermore, no plans existed for developing the missing knowledge. Finally, there was
no focus on, no comprehensive plans for, and little or no monitoring of the development,
maintenance, and extended use of key expertise within the enterprise.
As a result of these findings, top management decided that several changes were required.
Based on comprehensive considerations that resulted in a broad and integrated action
plan, reporting relationships and professional groupings were reorganized. It was also
found to be possible to simplify the organization and reduce management levels by
spreading knowledge and delegating functions. Several R&D programs were revised and
new R&D projects were established to develop some of the missing knowledge.
Additional key knowledge was obtained through acquisition of a small company. R&D
planning for the future was coordinated with marketing and management using a new
“partnership model.” Human resource management had previously been responsible for
general training and education coordination. This function was redesigned to serve the
joint focus of technical-business-management, and tools were provided to maintain
overview of the knowledge status, gaps, and progress in personnel and relate it to present
and future business needs. Finally, the overall strategic and annual planning process was
augmented to include explicit knowledge perspectives. In this context, management
reviews at all levels were revised to include knowledge perspectives. As a result, the
company now continues to perform KM audits on a regular basis.
The process company, to our knowledge, has not quantified the benefits from its KM
program. Their management considers the benefits they have obtained to be strategically
very important. There have been indications that the efforts have made the company
much stronger both from competitive and financial points of view.

EXAMPLE: BUILD A KNOWLEDGE-BASED SYSTEM TO EXPLOIT THE VALUE

OF PROPRIETARY KNOWLEDGE

The marketing department and executive management of a medium-sized financial

institution had explored new product opportunities for their marketplace. They identified
that the institution had expertise in financial planning for individuals and that this
knowledge potentially could be leveraged further if made available to the public at large.
It was decided to harness the knowledge assets by building a large, sophisticated
knowledge-based system (KBS) to provide financial planning services for families with
average incomes. Where new conditions made prior knowledge invalid, the available
expert knowledge was elicited and codified and was augmented with new research. A new
subsidiary was created to provide the service to the marketplace and to operate and
maintain the KBS.
The direct effect of offering the new service was to build a considerable customer base.
Revenues from the services paid only for variable operating costs of the new subsidiary.
However, a highly valued side benefit was the new knowledge that was developed and
codified to develop the knowledge base for the system. This knowledge was considered
priceless for having changed and improved the way financial planning was performed.
Although the immediate bottom-line benefits were few, the long term objectives were to
improve the institution’s corporate image and to attract new customers for the its other
services. These benefits seem to be realized and the whole project is considered a
success.
16 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

These examples cover only a few of the aspects of KM. They do, however, illustrate that
KM deals with aspects such as the need to obtain overview of the knowledge and expertise
that are available in the enterprise and how they are used, the potentials for managing
knowledge using conventional as well as advanced methods, and the need to rethink the way
one would like to do business. We are told by managers who pursue KM that they basically
look for four things.
1. To make their organization act more intelligently in a consistent and reliable manner.
2. To better use and exploit the available knowledge within their company.
3. To improve knowledge building -- organizational learning -- and retention of what has
been learned.
4. To gain better overviews of where they should direct efforts to improve the attainment of
the enterprise’s goals.

What Is Knowledge Management?

KM in its broadest sense, is a conceptual framework that encompasses all activities and
perspectives required to gain an overview of, deal with, and benefit from the corporation’s
knowledge assets and their conditions. It pinpoints and prioritizes those knowledge areas that
require management attention. It identifies the salient alternatives and suggests methods for
managing them, and conducts activities required to achieve desired results.
In a narrower and very practical sense, KM is a set of distinct and well-defined
approaches and processes to find and manage positive and negative critical knowledge
functions in different kinds of operations, identify new products or strategies, augment human
resource management, and achieve a number of other, highly targeted objectives. From these
perspectives, KM focuses on eight important areas:
1. Survey, develop, maintain, and secure the intellectual and knowledge resources of the
enterprise.
2. Promote knowledge creation and innovation by everyone.
3. Determine the knowledge and expertise required to perform work tasks, organize it, make
the requisite knowledge available, “package” it (in training courses, procedures manuals,
or knowledge-based systems, for example), and distribute it to the relevant points-of-use.
4. Modify and restructure the enterprise to use knowledge most efficiently, take advantage
of opportunities to exploit knowledge assets, minimize knowledge gaps and bottlenecks,
and maximize the value-added knowledge content of products and services.
5. Create, govern, and monitor future and long-term knowledge-based activities and
strategies -- and particularly new knowledge investments -- R&D, strategic alliances,
acquisitions, important hiring programs, etc., based on the determined opportunities,
priorities, and needs.
6. Safeguard proprietary and competitive knowledge and control use of knowledge to
ascertain that only the best knowledge is used, that valuable knowledge does not atrophy,
Knowledge Management: 17
An Introduction

and that it is not given away to competitors.

7. Provide KM capabilities and a knowledge architecture so that the enterprise’s facilities,
procedures, guidelines, standards, examples, and practices to facilitate and support active
KM as part of the organization’s practices and culture.
8. Measure performance of all knowledge assets and account for them -- at least internally --
as capitalized assets to be built, exploited, renewed, and otherwise managed to fulfill the
organization’s mission and objectives.
Four factors are particularly important in managing knowledge: (a) efforts to create,
acquire, and exploit competitively important knowledge to remain in a leadership position; (b)
daily management of knowledge to operate the enterprise smartly and effectively --
intelligently. This includes such aspects as producing and delivering quality services and
products to the highest customers satisfaction and with the least effort (i.e., operating as
inexpensively and environmentally desirable as possible without sacrificing quality and future
viability);1 (c) building knowledge within the enterprise to take advantage of innovation and
increased experience and the capability to pursue new opportunities; (d) the need to have
explicit overview of the knowledge assets within the enterprise.
The KM perspectives and framework presented in this book provides a new way to look at
knowledge as it is used in business. It provides selected approaches to handle many types of
knowledge-related situations. Some of the new approaches and processes are also treated
below, although detailed discussions of many of the processes and detailed approaches fall
outside the scope of this book.
KM should be considered as only one alternative among many valid perspectives and
approaches. We do not think it is the only way to manage knowledge. Instead, we suggest
that these approaches, when used in practice, provide a feasible and valuable way of dealing
with many knowledge issues that previously have not been easy to address. We believe it is
necessary to be both flexible and vigilant to foster creation of new methods and perspectives
as our collected understanding and experience grow in this area.

THREE PILLARS OF KNOWLEDGE MANAGEMENT

To manage knowledge effectively and securely, we need to assemble all valid and
relevant perspectives and approaches known to us into a coherent framework. With our
present understanding, we can visualize a KM framework based on three mutually supportive
pillars that rest on a solid foundation as illustrated in Figure 1-3. These pillars, which connect
KM to its foundation, consist of a number of methods and approaches that can be drawn upon
to meet a variety of different demands and challenges:

1 When we use the term “environmentally desirable” we consider the physical environment,
the economic environment, and the social environment. We also include the organization’s
internal work environment.
18 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Figure 1-3. The Three Pillars of Knowledge Management.

Knowledge Management

I II III
Survey & Synthesize
Categorize Appraise Knowledge-
Knowledge & Related
Evaluate Activities
Analyze Value of
Knowledge Knowledge Handle,
& Use, &
Related & Control
Activities Knowledge
Knowledge-
Elicit, Related Leverage,
Codify, & Actions Distribute, &
Organize Automate
Knowledge Knowledge

Knowledge Management Foundation

Broad Understanding of Knowledge
- Creation - Manifestations - Use - Transfer -

I. Explore the Knowledge and Its Adequacy

Survey Knowledge.
Categorize Knowledge, i.e., describe and characterize.
Analyze Knowledge and Knowledge-Related Activities.
Elicit and Codify Knowledge.
Organize Knowledge.
II. Find the Value of Knowledge
Appraise and Evaluate Value of Knowledge and Related Actions.
III. Manage Knowledge Actively
Synthesize Knowledge-Related Activities.
Handle, Use, and Control Knowledge.
Leverage, Distribute, and Automate Knowledge.
Knowledge Management: 19
An Introduction

Implement and Monitor Knowledge-Related Activities.

The framework’s foundation is made up of our general understanding of knowledge,
which focuses on how knowledge is created; how it is manifested in people’s minds as well as
in procedures, culture, and even technology; how knowledge is used to reason, solve
problems, make decision and other knowledge-related work by individuals and businesses;
and how it is transferred -- that is how we learn and how we otherwise can capture and
exchange knowledge. The foundation is presented in this book.
The methodologies and approaches of the current KM framework must be considered
preliminary. It will improve and be modified as we gain more experience with applying KM
and develop better understanding. The framework is presented to create a working
understanding of the methodologies and approaches, show how they relate to each other and
to the overall task of managing knowledge, and to illustrate how the concepts and methods are
made useful in business. The methods behind the framework is presented in Volume 3 of this
series.1
Traditionally, knowledge has been managed operationally by the managers directly
responsible for a particular function. Often activities were devised or selected to take care of
immediate problems, almost to the point of “fixing symptoms.” In contrast, the KM
framework, supported by the three pillars, provides approaches for immediate and higher
level managers to look at underlying functions and problems of knowledge-related issues.
They can use these framework approaches to plan their actions based on how well they serve
the broader needs and goals of the enterprise.
The concept of KM may bring to mind many images and associations. Some stem from
pre-conceived ideas of what such a concept “should be,” and other spring from visions of
what the concept “could be.” A few of the “What-it-is” and “What-it-is-not” aspects are
outlined in Table 1-1.

How Much Should an Organization Know about

Knowledge?
For an organization to be able to deal effectively with knowledge, it needs expertise to be
brought to bear whenever required. However, a deep understanding of KM is not needed by
large numbers of people within an organization.
Even if knowledge is the organization’s most important asset, knowing about knowledge
should, to a great extent, be tailored to each employee’s needs.
That is, deciding how much each person should know about knowledge is similar to
determine how much employees need to know about their basic professional area versus
ancillary areas such as organizational practices, systems and procedures, and TQM
philosophy and methods.

1 Wiig (1995), Knowledge Management Methods: Practical Approaches to Manage Knowledge.

20 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Table 1-1. What Knowledge Management Is, and What It Is Not.

WHAT IT IS
• A management philosophy that takes explicit advantage of knowledge to make the
organization act more intelligently.
• A management initiative that views and understands knowledge as it is used in operational
situations and for long-term strategic improvements.
• Ways to find, analyze, and focus on critical knowledge areas and associated management
opportunities, and ascertain that proper knowledge is available wherever needed.
• Methods to allow managers identify and characterize knowledge contents, needs, and
opportunities associated with specific operations.
WHAT IT IS NOT
• A set of isolated techniques without a common framework.
• A different label for Human Resources management and training.
• A standardized methodology for “how-to” KM.
• A different name for “expert systems.”
• A set of computer application programs.
• A system to control distribution and security of knowledge.

Three examples of organizational capabilities are illustrated in Figure 1-4. A “Beginning

Capability” is often found where a single individual has working knowledge of many of the
KM concepts and methods -- knowledge surveys, knowledge-intensive activities (KIAs),
critical knowledge functions (CKFs), knowledge-based systems (KBSs), and knowledge
profiling. That person is able to perform reliable independent work using some of these
methods and develops a small team that tackles selected types of knowledge-related problems,
perhaps building “expert systems” if their background is systems-related. Only after
understanding of basic KM perspectives and methods are shared by a large number of people,
can the organization approach effective handling of knowledge.
To be described as a “Well-Developed Capability,” basic knowledge must be spread to
many individuals -- managers and knowledge workers at all levels -- who need to know.
Specialty teams possess good working knowledge of general KM methods. A single elite
team has deeper understanding of how people and organizations process knowledge and its
members lead teams to work on more difficult problems. A single individual has further
understanding of broader KM issues and approaches and serves as the organization’s strategic
resource for how to manage knowledge in general.
Finally, a “Highly Developed Capability” requires broad sharing of KM perspectives and
methods and as well as considerable long-term investment in education and training. These
illustrations are not specific recommendations. Individual organizations have varying needs
depending on their size, make-up, and management direction and practices. In general,
however, knowledge about managing any important resource that affects all individuals in the
organization requires a minimal level of awareness by everyone to avoid neglect and
haphazard decisions.
Knowledge Management: 21
An Introduction

Figure 1-4. Three Examples of How Knowledge Management Expertise Must Be Built
and Spread to All Who Need It.
Penetration Within the
Organization

Every Affected
Party Is
Knowledgeable

Specialty Teams
& Many Affected
Are Knowledgeable

Hi
gh
ly
De
Many Specialty

ve
el
Teams Are

lD

lo
Knowledgeable

pe
ev

d
el

Ca
op
A Single

pa
ed

bi
Working Team Is
Be

Ca

lit
Knowledgeable

pa
gi

y
nn

bi
lit
in
g

y
One Person
Ca

Is
pa
bi

Knowledgeable
lit
y

No One Knowing
Is About
Knowledgeable Knowledge
Has
Competence Knows Knows About Has Working Understands Understands Broad & Deep
---> Few Surveys, Knowledge How People Knowledge Understanding
Specifics KIAs, CKFs, of Surveys, Think, & of Most
About KBSs, KIAs, CKFs, Reason, & Knowledge Aspects of
Knowledge Profiling KBSs, Profiling Decide Management Knowledge
Performance Has Limited Works Well Works Leads Leads Quality Leads
---> Know-How When Independently Teams to Knowledge Top-Quality
& Supervised & Reliably Work Surveys, Professional
Practical & Can Tackle in Reliably Elicitation, Work in All
Ability Simple Areas in Analysis, Knowledge
Issues of Specific Selected Modeling, & Management
Alone Responsibility Areas Improvement Areas
Conceptualization

Knowledge Work Changes Our Business Environments

In recent years, considerable change has taken place in work environments and the
professional and operational knowledge levels required to keep companies competitive.
Senior business commentators have suggested that we are moving towards a “global
22 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

knowledge society”1 and that we are in the midst of a “knowledge value revolution.”2
Further, it is commonly agreed that businesses and industries are becoming more complex and
knowledge-intensive -- a trend that will continue and, indeed, intensify in the next decade.
Business operations in manufacturing and service companies have become more
streamlined, requiring increased knowledge to operate efficiently.3 Enterprises are flattened
which has increased the need to make knowledgeable decisions at lower levels. Further, cycle
times for customer service response, design, manufacturing, and orders and delivery have
been shortened. At the same time, emphasis on improved quality has made it necessary to
introduce better knowledge and information earlier in the process, in more distributed
locations, and closer to the customer. This situation is aggravated by an uncomfortably high
mobility of the best and most knowledgeable people, paired with a less-than-ideal
preparedness of entrants into the labor force.
The emphasis on better and more information has also increased as our information
handling capabilities have improved. To illustrate: In 1980, information equipment
investments, as a fraction of all producer durables investments, was 20% in the United States.
In 1986 it had doubled to over 40%, and in the early 1990s it is expected to exceed 50%.4
Similar growths are evident elsewhere, in both industrialized and developing nations.
The new systems and work practices have yielded enormous value to their owners. But
they have also increased the flow of information to knowledge workers at all levels, making
available more relevant information than most have the time and knowledge to interpret and
use. The lack of appropriately placed knowledge has led to considerable knowledge
opportunity gaps in many enterprises. It has also led to many situations where the increased
sophistication and information generation have not produced the anticipated and potential
benefits and improved performance. The bottlenecks have shifted from quality and timeliness
of information to the quality and availability, when required, of knowledge at the point-of-
use.

1 See Gernot Böhme & Nico Stehr (1986) The Knowledge Society, Harlan Cleveland (1985)
The Knowledge Executive, Peter Drucker (1989) The New Realities, and Peter Drucker
(1993) Post-Capitalist Society for further discussions of the knowledge society .
2 See Taichi Sakaiya (1991) The Knowledge Value Revolution for an in-depth discussion of

how corporate customers and consumers have started to consider the quality of the
“knowledge content” an important factor in their purchasing decisions.
3 For discussions of fundamental changes in business and society as a whole, see Henry Kelly

et al. (1988) Technology and the American Economic Transition and Shoshana Zuboff
(1988) In the Age of the Smart Machine.
4 U.S. Department of Commerce, Bureau of Economic Analysis: "National Income and

Product Accounts," historical diskettes, Table 5.7.

Knowledge Management: 23
An Introduction

Knowledge Can Be Managed Effectively!

It is the experience of many managers that knowledge indeed can be managed effectively.
People have always managed knowledge, but with different degrees of awareness and
effectiveness. There is presently an increasing understanding that it is both effective and
profitable to manage knowledge actively, particularly when done with a specific focus and as
a deliberate activity using approaches and methods that are well designed and adapted to the
organization. This understanding is built upon the realization that once frameworks and
practical methods become available and internal teams can be established, it makes great
sense to devote management time and company resources to exploit existing knowledge
assets and steadily improve them by improving personnel, operations, products, and services
through active KM.

Figure 1-5. Four Key Areas of Knowledge Management.

Knowledge Assets:
- Experience -
- Expertise -
- Proficiency -
- Competence - Skills -
- Capabilities - and
Embedded Knowledge
of All Kinds

Knowledge
The
Activities: Organization's
- Create -
- Purpose -
- Build -
- Direction -
- Transfer -
- Strategy -
- Control -
- Practices -
- Use & Exploit -
- Culture -
- Evaluate -

Capability
& Tendency
of People &
Organization to
BUILD & USE
Knowledge
in Organization's
Best Interest

KM requires active coordination of several activities, assets, resources, and other factors
within the organization. In particular, four inter-dependent areas of the organization must
work well together, as illustrated in Figure 1-5:
1. Knowledge assets in people, technology, management and work practices, and all other
manifestations such as organizational structure, work flows, and division of labor;
24 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

2. Knowledge-related activities to build, exploit, and safeguard knowledge assets;

3. Willingness and capability by everyone in the organization to build and use knowledge
effectively to obtain the best benefits; and
4. Organization’s goals and moving forces that must benefit from, and support the detailed
activities ranging from development of new knowledge to application of available
knowledge to work objects.
These four key areas of KM influence each other directly. Without direct and attentive
management attention to all four areas and their interrelations, therefore, effective intelligent
operation cannot be achieved or sustained. Some examples of the nature of these
interrelationships are indicated in Figure 1-6.

Figure 1-6. Examples of Interrelationships Between the Four Knowledge Management

Areas.

• Deliberate & Improved

Knowledge Activities
Increase Knowledge Assets
Knowledge Assets:
- Experience - • Increased Knowledge Assets
Provide for More Powerful
• Improved Knowledge Assets
Increase Innovation & Creativeness - Expertise - Directions & Strategies
&
All Knowledge Activities - Proficiency - • Increased Knowledge Result in
Better Culture & Practices
- Competence - Skills -
• Exploiting Knowledge Adds
Value to Organization's Strategy
- Capabilities - and
Embedded Knowledge
• Organization's Purpose & Strategy
Adds Direction & Focus to of All Kinds
Knowledge Activities

Knowledge
The
Activities:
Organization's
- Create -
- Purpose -
- Build -
- Direction -
- Transfer -
- Strategy -
- Control -
- Practices -
- Use & Exploit -
- Culture -
- Evaluate -

• Improved Knowledge •
Increases Tendency to Engage Capability
In Knowledge Activities
& Inclination
• Increased Knowledge Assets •
Improves Capability to
of People &
• Culture Affects
Build & Use Knowledge
Further
Organization to Capabilities & Inclinations
BUILD & USE - Positiviely & Negatively -
• Improved
Capabilities and Tendencies Knowledge • Increased Knowledge Capabilities &
Inclinations
Increase Knowledge Activities
in Organization's Improve All the Organization's
Moving Forces
• Increased Knowledge Activities
Improve Capabilities & Tendencies!
Best Interest

Some of these interrelationships reflect well-known and accepted relations such as:
“Improved knowledge assets increase innovation and creativeness.” Other interrelationships
may be more tentative and may reflect beliefs that are particular to individual management
teams. Some of the relationships generate effects of “positive feedback.” They act upon each
other to make a “snow-ball effect” -- increased knowledge leads to increased knowledge use,
to increased value-added, to improved work practices and corporate culture, to improved
Knowledge Management: 25
An Introduction

capability to build and use knowledge, to increased knowledge use, and so on. In reality, we
can see this in many organizations where greater emphasis on knowledge and knowledge-
related activities breeds a spiraling effect to improve with very beneficial results.
KM need not be time-consuming or difficult for management and staff when using proper
approaches and methods. Besides, it becomes easier when the KM activities are integrated
with other programs and functions such as TQM, human resource management, planning, and
management sciences, and when they are supported by appropriately designed information
systems.
By introducing KM into other programs, these additional perspectives help explain many
problems and suggest better solutions. Several examples of the value of relatively isolated
KM actions in a number of U.S. companies were illustrated in a 1991 FORTUNE article on
“Brainpower.”1
Figure 1-7. The Ability to Apply Knowledge as a Function of Internalization.
Ability to Apply Knowledge

Takes the Full

Consequences Almost In Typically
of Having Deep Never Isolated
Understanding Instances

Reasons with
Knowledge But At Typically
Often Without Times
Integration
Can Use the
Knowledge At Typically
with External Times
Help

Knows to With At Typically Almost

Find Others to Luck Times Always
Use Knowledge

Does Not Never Plans Typically May Almost

Think to Use Use of Happen Never
Knowledge Knowledge

Barely Knows the Knows Knows Internalizes

Ignorant Aware of Knowledge About the the Knowledge
Knowledge Exists Knowledge Knowledge Fully
Depth of Understanding and Level of Internalization

As shown, the pillars of KM consist of approaches that provide a starting capability to

gain overviews, define interesting and critical situations efficiently and in enough detail to
determine how to deal with them, and assess the value of potential actions to set priorities.
The approaches also help establish and facilitate ways to characterize and organize the
knowledge and expertise, implement the required actions, monitor and control proper
implementation, and assess the performance once the changes are operational.

1 Stewart (1991).
26 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

One aspect of the value of managing knowledge is illustrated in Figure 1-7, where the
ability to apply knowledge is indicated as a function of the degree to which knowledge is
internalized. As expected, people who are ignorant about a knowledge area may never plan to
use knowledge from that area when they consider how to approach a task. Similarly, as
experts internalize knowledge, they will either use the knowledge themselves or have others
use it when it becomes relevant.
As one starts to manage knowledge within the enterprise, it becomes routine to identify
which knowledge is required, at what level it must be made available, and what its value is in
each situation. When this understanding becomes explicit, it becomes clear to which extent
knowledge investments are required in certain areas to ensure the desired results.
Until the computer, there had been no breakthroughs in management of knowledge since
the invention of printing. And still, the reigning paradigm of how to exploit knowledge is
often passive work aids or conventional libraries filled with collections of static knowledge
combined with a person to interpret and apply that knowledge to do work. Applied artificial
intelligence (AI) has been developed into a practical and reliable technology that provides us
with additional processes to manage knowledge. New paradigms are introduced to deal
formally with simpler aspects of explicit knowledge. AI provides approaches to elicit and
codify knowledge and implement knowledge-based (or expert) systems. With “knowledge
engineering” methods and AI technology, it has become possible not only to capture, codify,
and deliver static and explicit textbook knowledge, but also to automate less complex aspects
of the dynamic and tacit knowledge and reasoning strategies that human beings employ when
they put expert knowledge to use.
Many business authors have described commercial developments and future prospects of
AI. In addition to conventional methods for managing knowledge, we are now able to
1

leverage and deploy corporate knowledge assets by automating selected expert reasoning to
increase business advantages. In support of these approaches, most Fortune 500 firms now
have significant knowledge-based system in operation and new projects underway. It must be
recognized, however, that use of computers, information systems, expert systems, and similar
areas is a very small part of KM.

Knowledge Management Requires New Methodologies and

Perspectives
Usually, introducing KM in an enterprise results in considerable change. It requires
adoption of new perspectives and management and work practices and implementation of new
approaches. Such changes require efforts and time. But importantly, the changes will provide

1 For a discussion of the present status of applied AI, see, for example, Edward Feigenbaum
et al. (1988) The Rise of the Expert Company; David Hertz (1988) The Expert Executive;
Paul Harmon & David King (1985) Expert Systems; Wendy Rauch-Hindin (1988) A Guide
to Commercial Artificial Intelligence; Wiig (1990) Expert Systems: A Manager’s Guide.
Knowledge Management: 27
An Introduction

capabilities to manage knowledge with flexibility and leverage not previously available and
made possible by the KM approaches that allow pursuit of strategic and tactical opportunities
in ways not thinkable earlier.
Approaches for managing knowledge include a number of conventional activities, such as
methods to survey and catalog; develop and build; elicit and codify; distribute, share, and
exploit; and authenticate and control professional knowledge and functional expertise. In
addition to conventional activities, new and more advanced approaches are created to focus
directly on the knowledge people hold, for example to determine how to augment it by
training, how to redistribute it to points-of-use, or how to automate it in knowledge-based
systems.
Significant changes are taking place in management and business practices. These
changes affect information technology, approaches to managing knowledge, and the
preparedness of personnel to perform the complex tasks that now are required. A survey of
U.S. executives was performed to provide perspectives and clarification of the needs and
opportunities associated with these issues and with KM in business. According to this survey
better utilization, handling, and building of knowledge assets may lead to substantive changes
in both business and operational practices.
Many executives indicate that they are already searching for ways to deal
comprehensively and consistently with knowledge throughout their enterprise. They are
looking for powerful, broad concepts that are supported by practical, down-to-earth
approaches. In addition to the global perspectives that executives seek, new understandings
need to be fostered in managers, professionals, and knowledge-workers at all levels. Such
understandings need to focus on how humans reason and make decision in practical
situations, what the required knowledge is and how it is used, and how one can build,
enhance, and leverage the knowledge assets in ways that serve the objectives of the
individuals involved.

Applications of Knowledge Management

Many examples may be cited of how companies have made specific use of KM beyond
those presented at the beginning of this chapter. Additional examples are indicated briefly in
Table 1-2 as outlines of the different categories of uses. KM is here built on insights and
perspectives that focus on making knowledge explicit and manipulating it to perform
functions and tasks that contribute to the objectives of the enterprise. Additional examples
will be discussed in later chapters to illustrate different perspectives on how expertise,
knowledge, and skills may be managed explicitly.
Perspectives on how knowledge may be managed come from many sources. For example,
cognitive sciences and philosophy provide us with capabilities to explicate knowledge. Social
sciences, particularly anthropology and ethnography, provide us with abilities to analyze and
28 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

describe how knowledge is used and how people collaborate to pool their knowledge.
Insights into the business use of knowledge and how it can be exploited comes from
individual professional fields, as well as management sciences, business administration, and
applied artificial intelligence. The understanding of operational value of knowledge comes
from economics. And perspectives for assembling these approaches into a coordinated and
integrated management system have their roots in cybernetics. Hence, KM must be
considered as a multi-disciplinary activity that requires some understanding of many areas.

Table 1-2. Abbreviated Examples of Knowledge Management Applications.

• Plan R&D based on business values of knowledge to create missing knowledge and exploit
existing expertise.
• Identify and strengthen core competencies.
• Support Business Process Reengineering -- by providing better distribution of knowledge-
intensive activities and improved knowledge at points-of-use for higher quality work
products.
• Analyze and redesign knowledge transfer and knowledge exchange between adjacent
operating functions.
• Determine training needs for groups of employees to better perform knowledge worker tasks
in particular business functions.
• Review personnel periodically to consider their knowledge profiles in relevant knowledge
areas. These reviews will provide managers with information that allow them to place
employees in the most appropriate positions, allocate responsibilities to take advantage of
their knowledge, and determine training and educational needs.
• Survey knowledge in specific operating departments to identify Critical Knowledge
Functions (CKFs) that need management attention.
• Analyze knowledge bottlenecks and “Communication Gaps” and alleviate past problems.
• Survey knowledge to identify candidates for Knowledge-Based Systems.
• Develop expert systems with particular emphasis on eliciting and codifying knowledge and
conceptualizing the system function as it will operate with the new capabilities.
• Codify knowledge from departing personnel.
• Create new knowledge-intensive businesses and subsidiaries.

In spite of the varied, and at times esoteric, roots of the KM methods, the result has been a
set of practical and operational approaches with varied emphases. Some approaches support
personnel review and human resource planning and management or complement management
initiatives such as TQM and business process reengineering. Others support organizational
changes and redistribution of responsibilities. Still others are useful in supporting new
endeavors such as “strategic management of knowledge” (SMK) to map broad areas of
knowledge in an effort to identify weak areas that need strengthening through R&D or
acquisitions and strong areas that can be exploited by creating new products and services. All
of the approaches to KM that are described here have proven effective means to identifying,
Knowledge Management: 29
An Introduction

leveraging, and augmenting knowledge assets. Active management of these assets has
brought competitive advantage to corporations seeking new and effective approaches in an
increasingly competitive marketplace.
A major shortcoming of important business decisions is often the result of lack of
knowledge. Insufficient knowledge reduces our ability to identify, explore, and evaluate
higher order effects from potential actions. While relatively little knowledge is required to be
aware of the direct effects of such actions, more knowledge is needed to appraise the
likelihoods of the magnitudes of these effects. And considerable deeper knowledge is needed
to judge the second- and higher-order indirect effects that often are the ones of real interest.
Hence, when additional salespeople are added in a store, for example, it takes little knowledge
to see that this will lead to higher payroll and less customer waiting. However, it is more
difficult to determine if such an action also will lead to greater customer satisfaction and
loyalty, increased market penetration, larger sales volume, and improved profit margin.
Sound business and professional decisions are typically based on such complex
judgments. These judgments result from increased insights and understanding of the
upcoming situations -- from better knowledge. One major function of KM is to ascertain that
appropriate knowledge is made available and internalized and used by people throughout the
enterprise in order to ensure that the enterprise’s business and professional decisions are of
top quality. Only then can the enterprise prosper.
Chapter 2
Some Knowledge Management Concepts

This Chapter
Considerations for managing knowledge require several perspectives. One perspective is
associated with the needs for, and purposes of, managing knowledge -- why we wish or need
to manage knowledge and what the benefits might be. A second perspective deals with how
to approach KM from a practical standpoint and which tools and methods are available to
support the practice. Finally, a third perspective is related to what knowledge is, how it is
used, created, and exchanged by individuals and organizations, and which forms it takes
under different circumstances and for different uses (i.e., how it is manifested). It is the third
perspective that is pursued in this book.
A major motivation for managing knowledge stems from the desire to empower
individuals, and thereby the organization, to act intelligently and to work smarter by providing
better knowledge and encourage its use. Some concepts associated with this perspective are
presented in the next sections.
An important set of general concepts is associated with how knowledge is built and used.
We need to establish a general model and identify which functions and activities are needed to
perform these important functions. Much of the work with KM will center on building and
using knowledge in various ways; therefore, we will meet these concepts in many variations
during the remainder of this book. These concepts are examined in some detail in relation to
four aspects of the more general model: (a) building; (b) holding; (c) pooling; and (d) using
knowledge.
Towards the end of this chapter, we present a preview of KM methods that also will be
discussed as part of the last chapter in the book. We will also be concerned with higher-level
methods for surveying knowledge and appraising the value of potential knowledge-related
activities. In addition, we will provide selected management perspectives on several technical
approaches such as knowledge-based systems (KBSs).
The aspects presented in the following chapters range from relatively abstract models to
detailed descriptions and viewpoints of how knowledge is used as the basis for reasoning,
problem-solving, creating, and decision-making. Given such a broad spectrum of
applications, it is important that we provide a road map to examples of where the methods
apply and how they can benefit the management of the enterprise. This chapter is intended to
Some Knowledge Management Concepts 31

provide such an overview.

Before we present the roadmap, however, we need to discuss three topics as a background
for application of the KM framework: (a) the need for organizations to learn and build
knowledge to keep up with the world -- to be a “Learning Organization”; (b) determination of
which knowledge is associated with acting intelligently; and (c) the notion of “Working
Smarter” and how knowledge relates to that concept.

Scopes of Knowledge Management

KM scopes and approaches vary considerably from organization to organization as they
are determined by management’s focus and priorities. That is, understanding, resources, and
expertise will emphasize certain approaches to the exclusion of others. Initially, most
organizations start to manage knowledge with relatively narrow objectives and scopes, which
they later broaden into new areas as they become important.
For some organizations, KM initially focuses narrowly on alleviating recognized
knowledge-related bottlenecks. They will, for example, (a) reengineer the particular work
function by adding capacity, in the form of adding people with requisite knowledge or
introducing expert systems to bring in the knowledge; (b) rechannel the work flows to let
other functions deal with difficult tasks; or (c) change the nature of the work products to
remove the need for special knowledge. To achieve good solutions, the target functions need
to be studied in some detail, for example, from “task environment” and similar perspectives as
shown in Figure 2-1.1
For other organizations, KM is broader, perhaps focusing on improving general
operational effectiveness and empowering knowledge workers at all levels by increasing their
access to knowledge and by making sure new knowledge is constantly developed. Such an
approach may lead to general training and educational programs, or to other approaches to
building knowledge both in people and in organizations.
Better knowledge lets people work more intelligently and smarter, be flexible and
versatile, and allows them to take initiative and act responsibly on their own. To be effective,
people need considerable understanding of which knowledge is present, which knowledge is
required to perform critical tasks throughout the organization, and which resources and
knowledge transfer -- knowledge flow -- modes are available and applicable.

1A number of selected techniques are indicated in this figure. Most of these are discussed
briefly in Chapter 5 and in more detail in Wiig (1995), Knowledge Management Methods:
Practical Approaches to Manage Knowledge. The acronyms stand for:
TEAM - Task Environment Analysis and ModelingKBS - Knowledge-Based Systems
KURA - Knowledge Use and Requirements Analysis KFA - Knowledge Flow Analysis
CKF Analysis - Critical Knowledge Function Analysis
32 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Figure 2-1. Examples of Knowledge Management Scopes with Corresponding Subgoals

and Associated KM Techniques.
Knowledge
Management Selected
Scope Techniques
Knowledge
Surveys

Alleviate Operational Knowledge

Known CKFs Effectiveness Assets

Determine Determine TEAM

Knowledge Knowledge Task Environment
Use Factors Use Factors Analyze & Model

Determine Determine CKF Analysis

Business Value Business Value Critical Knowledge
& Alternatives & Alternatives Functions

Determine Determine Knowledge

Needs & Needs & Profiling
Availability Availability

Knowledge Knowledge Knowledge KURA

Work Work Work Use & Requirements
Practices Practices Practices Analysis

Determine KFA
Knowledge Flow Knowledge Flow
Impovements Analysis

Use Best Find & Use Skill

Knowledge Best Areas of Inventories
Expertise

Deploy Deploy KBS

Expertise to Expertise to & Expert Systems
Point-of-Use Point-of-Use

Build & Exploit Core

Proprietary Competency
Knowledge

For still other organizations, KM is strategic, focusing on building and exploiting

knowledge assets through inventions, R&D, joint ventures, and other explicit projects. In
these situations, macro perspectives and broad knowledge analysis techniques must be applied
to understand the business value of different areas and manifestations of knowledge.
Many other approaches to KM are equally relevant. For example, the organization may
focus on ascertaining that excellent experiences are not lost through neglect or attrition. It
may wish to ascertain that only the best knowledge is brought to bear to perform its business
processes. Or it may wish to automate as much of its in-house knowledge as possible to make
it available to those with needs to know.1

1This approach was chosen by the Initiative for Managing Knowledge Assets (IMKA) a
consortium of seven large U.S. companies to develop technical approaches for this purpose.
Some Knowledge Management Concepts 33

How Can We Learn Faster?

Companies, as other organizations, are operated in ways that is meant to ensure that they
are successful by attaining their operating objectives to the largest extent possible. Their
owners frequently expect them to be better than their competitors and to maintain or increase
their financial and market positions as the world around them changes. To meet such
expectations, or even to stay in business, companies constantly need to change and improve.
They constantly need to learn -- from their own experiences, from research, from personal
innovations, from observations of what others do, and from any available source. To change,
they must put to use what they learn and not forget the valuable lessons they have learned.
Only when they are successful in these activities, can companies be successful. “For any
organization to survive and have a chance of growing, its rate of learning has to be equal to,
or greater than, the rate of change in its external environment.”1
In other words, if an organization consistently learns more slowly than the world around it
changes, it is doomed. If it is a fast learner, it can continue to increase in value. If it is a slow
learner, its value will decrease.
From a KM point of view, we can assist the organization in becoming a fast learner in two
principal ways. The first way is to identify the strengths and weaknesses of the way it and its
people now learn and find additional opportunities for learning. The managers can then
exploit the strengths, work to correct the weaknesses, and take advantage of the opportunities.
The second way is to ascertain that what has been learned is being put to use.
Just as companies have to learn to keep up with the changing world, people also have to
learn. As individuals, we have to update what we know and make our knowledge current. As
the world changes, we have to be able to deal competently with it, in ways that make it
possible for us to sell our services to make an acceptable living. Ideally, we would like to
learn well enough to be permitted to work in environments and with subjects that we enjoy
and are interested in.
For us to achieve our best performance, and, therefore, position ourselves to our best
advantage, two things are necessary: (a) we need to know how to perform our chosen work
expertly well not only for normal conditions, but also for many less frequent but critical
conditions; and (b) we need to “work smarter” -- both within the context of the work function
and within the context of the organization as a whole.
All these demands require us to learn faster and more effectively. Consequently, we need
to recognize which knowledge to acquire and how to acquire it. This is where KM is helpful
by identifying which knowledge is required, where it can be found, and how it can be
obtained. At times, the needed knowledge does not exist, but has to be created -- by research
and development, innovation, or by other means. That learning process is more difficult than
if the needed knowledge already exists somewhere and can be transferred through
conventional learning.

1 Garratt (1990), p. xiv.

34 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

The Organization’s Success Depends Directly on Everyone

Acting Intelligently.
That, However, Requires Excellent Knowledge!
For an organization to conduct business successfully requires that at least three conditions
be present. it must have (a) a “business” -- products and customers for its products; (b)
resources like people, capital, and facilities; and (c) capability to act. It is the third point that
will be addressed in this chapter.
For the organization to conduct sustained business effectively and successfully, it must
consistently provide good products and services. It must have customers who are willing and
eager to accept its products and services. It must act intelligently to position itself relative to
its competitors, respond appropriately to its customers, understand the changes and
requirements of its market, create the best products, maintain and improve its resources,
obtain the best performance from them, and prepare for the future while remaining solvent in
the present.
The main objective of KM is to make organizations intelligent-acting. People must be
empowered by being provided with knowledge and incentives to work in ways that make the
overall organization capable consistently and continually of making excellent decisions,
performing high-quality knowledge work, and act appropriately at all times within its own
domain, vis à vis its customers, other individuals and organizations, society, and the
environment. As a result, they must be given the knowledge resources to “work smarter,” the
capability to keep their knowledge up to date, and the permission to use what they know.
Most of these factors are closely related and are favorably influenced when people and,
therefore, the whole organization act more intelligently. In fact, the very success of the
organization is directly dependent upon how intelligent-acting it is possible to make it and
everyone within it. Consistent intelligent behavior requires that individuals and
organizations: (a) show explicit behavioral traits that are effective and acceptable; (b) prepare
well; (c) choose appropriate postures; (d) provide excellent problem-solving; and (e) make
outstanding decisions and implementing those decisions decisively -- that is, act! An
overview of the factors that we consider needed for people and organizations to be intelligent-
acting are presented in Table 2-1.
Intelligent-acting behavior is important in all knowledge work. We tend to think of it as
particularly important in “valuable” problem-solving or decision-making situations such as
those that set corporate strategy and other high-level tasks. Contrary to that notion, however,
intelligent-acting may be equally important “on the line.” Improving the approach and quality
of the myriad of “small” problem-solving situations cumulates into a significant improvement
in knowledge worker performance for the organization as a whole and makes the difference
between a high-performing organization and a well-intending, but stumbling organization.
Some Knowledge Management Concepts 35

WHAT KNOWLEDGE DOES IT TAKE TO ACT INTELLIGENTLY?

Knowledge is the principal force that determines and drives our ability to act intelligently.
While that includes knowledge of our primary work function, it may be more important to
have a broad base of world knowledge and specific understandings of many different areas
that may be related to our work in various ways. Innate capabilities clearly provide the basics
for acting intelligently, but without specific and general knowledge we cannot attain the

Table 2-1. Representative Requirements for Acting Intelligently.

Exhibit effectivePERSONALITY TRAITS:
• Show initiative and responsibility • Be persistent
• Adopt behavior suitable to the situation • Be a good listener
• Think before acting • Think independently
• Be flexible and responsive • Be idealistic and principled
• Be willing to self-correct
Be well PREPARED: Choose appropriate TACTICS:
• Acquire knowledge from all sources and build it • Anticipate future developments and plan
into an integrated and congruous whole accordingly
• Be versatile • Invest effort in proportion to the situation’s
• Be informed importance
• Create new and important perspectives by • Coordinate with all relevant parties and build
integrating seemingly unrelated information consensus when required
• Understand the surrounding world • Take relevant actions when appropriate
Provide excellent PROBLEM-SOLVING: Make outstanding DECISIONS:
• Use all relevant knowledge • Accept the challenge and take charge
• Consider all readily accessible information --but • Identify the objectives behind a situation
use only what is relevant • Consider all relevant alternatives
• Reframe the problem and consider different • Consider consequences
perspectives • Set priorities
• Be imaginative, innovative, and creative • Check reality of the best alternatives
• Analyze situations beyond what is apparent at the • Select the best alternative considering all
surface - beneath symptoms constraints, objectives, and uncertainties
• Discriminate and categorize • Communicate decisions convincingly
• Reason rationally and make very few errors • Implement decisions effectively

necessary practical and subject-specific characteristics. With improved knowledge, we can

improve the quality of our work and generally progress by working smart, rather than hard --
both as individuals and as organizations.
With improved knowledge we know better what to do and how to do it. We will also
know why we can do it better and why it will serve us and our organizations well. These are
the basic reasons why the major purpose of KM is to make the enterprise intelligent-acting by
facilitating the creation, cumulation, deployment, and use of quality knowledge. That in itself
also requires considerable knowledge as discussed in later chapters.
Acting intelligently requires proficiency in many areas. Overall, it requires broad
knowledge, some in each relevant area. Six separate knowledge domains need to be
36 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

developed (see Chapter 4 and Figure 4-11):

• Knowledge of knowledge and thinking about thinking
• “World knowledge” of society, science, people, etc.
• Knowledge of primary work-related domain
• Knowledge of adjacent work-related domains
• Knowledge of private life, hobbies, etc.
• Basic knowledge of “walking,” “talking,” 3 Rs, social skills, etc.
Referring back to the factors listed in Table 2-1, we can provide examples of the
approaches, activities, and related knowledge that is required to act intelligently. In
particular, the approaches illustrated by the brief vignettes below indicate implicitly the
knowledge required to perform the tasks and activities.

Exhibit Effective PERSONALITY TRAITS

One of the most important aspects of acting intelligently involve displaying personality
traits that support the knowledge-intensive activities that are undertaken in effective ways.
This is as important for organizations as it is for individuals even though we do not normally
think of organizations as possessing “personality traits.” In people personality traits are
innate, but are changed and strengthened with acquisition of new knowledge and experiences.
In an organization, these traits are almost exclusively a function of organizational learning as
knowledge is built up in people and embedded in organizational systems, procedures,
practices, and culture. Examples of the different traits listed in Table 2-1 are:
• Show initiative and responsibility -- Initiative is a highly valuable aspect of personal
behavior. Taking responsibility for following up the initiative to a successful conclusion
is even more valuable. Broad and reliable knowledge is required to assess when
initiatives are needed and to determine the scope of responsibility.
Fran is approached by a customer who has received an incomplete order and needs the
full order very soon. Although Fran is not directly responsible for customer service, since
she cannot locate a customer representative, she decides to locate the missing goods, have
them shipped to the customer, and ascertain that the records are updated.
• Adopt behavior suitable to the situation -- It takes considerable knowledge to evaluate
situations and understand what the appropriate personal role should be; how to address
relevant issues; how to conduct acceptable interpersonal relations; how to communicate
clearly; use the best mode of communication; etc.
Joe is invited to observe the company’s strategy session to be well informed when he later
works to detail the implementation plans. As Joe listens to points advanced regarding
potentials for a new plant, he realizes that some of the facts are wrong. Instead of
speaking up to interrupt the discussion of which he is not a part, he passes a note to the
president with the correct facts.
• Think before acting -- Things are not always what they appear to be and the first
reactions for how to handle a situation are not always appropriate. It requires considerable
Some Knowledge Management Concepts 37

knowledge to recognize the various aspects that need be considered.

Betsy is faced with an irate customer who has received the wrong merchandise. Her
immediate reaction is immediately to credit the customer’s account and send out the
desired merchandise. On second thought, she realizes that she needs to receive the first
shipment back in good order before she can credit the account.
• Be flexible and responsive -- Have the background and willingness to listen and react to
different opinions; understand, respect, and take into account other perspectives and
positions; adapt to nonroutine and diverse situations; and be ready to assist customers,
coworkers, and others with carrying out various tasks. This requires an attitude that, in
large part, is based on the security that comes from knowledge.
Tom has a well-thought-out idea for the new subassembly design that he is certain will do
everything required. He presents it to Paul, the lead designer, who points out that it may
need modifications to work in the rough environment where it will be used. Tom first is
inclined not to accept Paul’s suggestions, but then realizes that his initial scope was too
narrow and he takes his design back to include the features required.
• Be persistent -- Do not give up after the first try. Make sure, though, that the direction is
appropriate and reasonable and serves the overall situation -- something that takes insight.
As a member of the TQM taskforce, Dick tries to persuade the others that the time allotted
to process loan applications is too short and leads to shoddy decisions. At first they think
that is not the case. Dick is convinced that all the other proposed changes will not correct
the quality problem fully and is able to give specific examples that are accepted in the
end.
• Be a good listener -- Pay attention to what others communicate. Don’t let preconceived
notions destroy the process! Listen with expressed interest and suitable comments to draw
out their observations, thoughts, perspectives, and ideas -- many points are valid and
sometimes not obvious! Extensive knowledge is required to understand what is being
communicated.
Harry interviews Pete, manager of a function that is part of the reengineering program.
This is one of the last functions and Harry has formed good ideas about needed changes.
As he listens to Pete, he realizes that Pete brings out information about frequent situations
that have not been considered earlier. Harry becomes interested and is able to obtain
valuable ideas from Pete.
• Think independently -- Develop and maintain independent conclusions and judgments
based upon understanding and even independently obtained information. Holding
independent -- and relevant -- opinions requires extensive insights.
Mary works on a team to understand Remo Corp’s market image. A contract survey is
provided and the other team members decide that it captures the image quite accurately.
However, Mary thinks that they have overlooked important aspects that are expressed by
some customers and refuses to give up her view.
• Be idealistic and principled -- Constantly refer back to what ideally may be achieved and
to basic principles useful for governing decisions.
Fred plans and designs the company’s new leaching pond for toxic wastes. One location
favored by the plant manager is convenient and will be a relatively low-cost solution.
However, it may overflow into the local creek under a “100-year” rainstorm. It will also
be too small for future expansions. Fred decides that another location, farther away,
meets his criteria. It is more expensive, but he fights for it and wins.
38 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

• Be willing to self-correct -- Be on the outlook for misleading understandings, judgments,

perspectives, and conclusions and search for ways to correct such problems. Know how
to interpret what is observed to ascertain that it is valid and to understand how it integrates
with prior knowledge.
Joe is product manager for accounting forms. He has always believed that accountants
prefer the color combinations his company produces. To his dismay, he learns that a
small California firm has tried other colors and have found much better acceptance. He
verifies their findings by a trial marketing of his own and revises his judgment in spite of
the pain and creates a new product line with the new colors.
The knowledge required to exhibit effective personality traits must often be solidly
internalized -- in many areas to the point of being automatic -- in order to be available and
used nonconsciously in demanding situations. Some of the knowledge required for general
understanding can be less internalized and may be held as systematic or even idealistic
knowledge.1

Be Well PREPARED

It takes considerable knowledge to be suitably prepared for a wide range of situations,

requiring us to invest deliberate effort to obtain and organize it. On the personal level, we
must obtain idealistic and systematic knowledge through any available learning mode and
pragmatic and automatic knowledge through training, off -- and on the job. On the
organizational level, The Learning Organization2 becomes a model for how to be prepared by
learning quicker than the competition and making what has been learned available to all who
need to know. Examples of the particular knowledge that we require to be prepared in the
different areas include:
• Acquire knowledge continuously from all available sources and integrate it into a
congruous whole -- As individuals and members of progressive organizations, we need
broad background knowledge to determine which areas and topics to learn about and be
interested in. We must understand how knowledge is created, where it can be found, and
what the best acquisition and knowledge-building modes are -- whether self-learning,
training, apprenticing, joint venturing, buying expertise, etc. Integrating new knowledge
requires understanding how we think and how organizations assimilate knowledge, the
various knowledge domains, and approaches to handle different perspectives.
Carol is Alfa’s director of technology. She has a voracious appetite for understanding
what happens in the world in terms of how people use technology, how technology is used
to create capabilities of various kinds, what the scientific aspects are behind different
techniques, and what can be expected a few years from now. Carol has taken Alfa on
numerous benchmarking excursions and has elevated the company’s sights about what is

1 The four “conceptual knowledge levels,” idealistic, systematic, pragmatic, and automatic
knowledge are discussed in Chapters 3 and 4.
2 Bob Garratt (1990) offers an excellent and insightful discussion of this topic in Creating a

Learning Organization. Peter Senge (1990) provides an extensive discussion of how

organizations can and must learn better in The Fifth Discipline. Tom Peters (1992) also
discusses the need for organizations to learn in Liberation Management.
Some Knowledge Management Concepts 39

technically possible. She is an avid theater and “culture” buff who devours novels and
trade publications. Carol is unusual in that she channels what she learns throughout the
organization, has fought for increased education budgets, and makes available excellent
courses in many areas.
• Be versatile -- Possess knowledge beyond narrow specialty areas to be versatile to handle
different types of tasks, often quite different from primary areas.
Archie is always curious. A mathematician, he became one of FretCo’s actuaries but was
concerned about his inability to influence underwriting decisions. He began to study risk
management practices in client firms and became an expert underwriter with his
combined theoretical and practical understanding. Archie was extrovert and soon found
himself supporting difficult sales situations. After a while, Archie was put in charge of an
important function to integrate sales, underwriting, and actuarial functions.
• Be informed -- Beyond knowledge, we need current and reliable information about “what
happens” within our primary and adjacent work domains and in the world in general. We
need information about all kinds of situations to handle them without having to collect
extensive information; anticipate events and changes and avoid surprises; and develop
proper judgments. We need to understand where “the world” is headed in order to be able
to interpret information and developments that relate to our activities and recognize what
is important and what is not.
John is continually on the outlook for investment opportunities. He is very successful and
specializes in small, well-established companies in new industries. To “keep abreast of
the others,” as he says, he reads widely, visits with all kinds of companies, and has
developed a database on his portable PC that he keeps up to date every chance he has.
His mind is also a storehouse of facts. John has an interesting approach to assessing
opportunities. He screens opportunities in his mind to focus on those he thinks are
interesting. He rarely forms strong opinions but evaluates interesting situations using
computerized models and facts both from his database and from his memory.
• Create new and important perspectives by integrating seemingly unrelated
information -- Internalizing new information to transform it into knowledge includes
developing categorizations, associations, and other relations between the mental objects
that result from characterizing the new information. Broad knowledge from different
areas makes us “see” new connections when we receive information on a new situation.
That is, we can understand “what the new information means” -- discover strengths and
new opportunities or detect weaknesses and threats. However, the knowledge areas
needed to see these connections cannot be determined à priori.
Susan is a highly regarded analyst at a State Department country desk. Her area of
interest is public concerns and emergent social directions. She receives a number of
communications every day regarding developments and observations from “her country.”
She is interested in economic, political, and social perspectives, history, and even some
theory. She reads all kinds of newspapers and periodicals, a fair amount of fiction, and
interacts frequently with peers from all over. She does this, she says to be informed and
to see early patterns that tie together events in different areas and in unexpected ways.
• Understand the surrounding world -- Ideally, acquire broad insight into any area to
imagine and detect opportunities and potential hazards when new situations arise; have
perspectives and judgments regarding new conditions and situations as they emerge; be
able to interpret them; and create approaches to deal with them.
40 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Carlos is a consumer electronics wholesaler who specializes in being first with new
products. He has been successful with the large risks he has taken in the past by selecting
devices he guessed would be in high demand. He now detects that society is moving in a
direction that may lead to increased demand for devices that many consider wild and far-
fetched -- Carlos too thinks some of them are. However, he concentrates on a few
selected devices and is able to obtain good terms since he is the only volume buyer at this
time. As months pass, Carlos is able to cash in on his foresight -- he has indeed read the
market direction correctly.
For each of these characteristics, we benefit from having understanding knowledge about
knowledge and being able to think about thinking. As epistemologists have known for a long
time, such knowledge allows us to approach knowledge building -- as individuals and
organizations -- deliberately and effectively, to distinguish what is true and what is false, and
to identify incongruencies and other problems.

Choose Appropriate TACTICS

The tactics that an individual or an organization chooses to achieve desired outcomes

contribute significantly to how intelligent-acting the person or organization will be. The
posture that we display before a given situation reflects our reaction to it and facilitates how
we can deal with it. Choosing appropriate tactics can be summarized as follows:
• Anticipate future developments and plan accordingly -- Expect future priorities; deal
promptly and effectively with important contingencies; act proactively; avoid problems;
and take advantage of emerging opportunities.
Brian is concerned about the performance within his sales territory. He senses that his
major competitor is gearing up for a major sales campaign and they may offer significant
concessions and even introduce new services. Although Brian is not certain, he briefs the
VP-Sales and obtains permission to lower prices in case the competition starts a price
war. Moreover, he expedites plans to offer a new service that has been in the planning
stages for months and is permitted to start selling it as a preemptive strike before the
competitor starts their campaign.
• Invest effort proportionally to the situation’s importance -- Avoid wasting effort on
insignificant activities to the exclusion of what is important.
Helen faces two difficult situations. She must decide how to fire a manager whose job
performance has been unacceptable in spite of repeated coaching and warnings and she
must decide who should take his position. In her mind the latter decision is easy since
José is available and qualified. She is inclined to spend time preparing for the first
decision but then decides that is ridiculous since it is clear what needs to be done and the
implications are minimal. Therefore, Helen clears it with human resources, calls the
manager into her office, gets the firing over with, and starts to analyze if José really is the
right choice and if so, what his responsibilities should be. She finds that this is not as
clear-cut as she had thought.
• Coordinate with all relevant parties and build consensus when required -- Obtain
cooperation to facilitate successful handling of situations.
Some Knowledge Management Concepts 41

Liz has worked on the department reengineering plans and has a good blueprint for how
knowledge flows, work flows, information flows, and organization structure might be
changed. Although she and her team have visited with all those affected throughout this
process, she has not discussed the new version with any of them. Prior to next Monday’s
formal plan review meeting, Liz visits with each of the four managers and some of their
staff to discuss their perspectives and reactions. She uses many of their suggestions to
revise some parts of the plan and then invites them to a Friday afternoon “beer-bash” to
have an informal “dart-throwing” session since she knows that some will remain unhappy
with the proposed changes.
• Take relevant actions when appropriate -- Ascertain that situations are moving toward
their goals by making small and large actions happen whenever necessary.
Sal supervises the building of the new office building. When they excavate the
foundation, they find an unexpected rock outcropping where the sewer line is supposed to
exit the building. Sal immediately notifies the architect and construction engineer, but
while waiting for them decides to uncover the outcropping to determine its extent and to
test it to see if it can be blasted or excavated.
When we are quick to choose a particular tactic, we use our automatic knowledge guided
by our idealistic knowledge. When we adopt a deliberate and well-planned tactic, we rely to
a greater extent on our systematic and pragmatic knowledge. One aspect of appropriate
tactical planning and execution deals with how well we understand the organization’s
objectives and direction and how good our knowledge is for transforming these objectives
into practical steps given existing situations.

Provide Excellent PROBLEM-SOLVING

The ability to provide excellent problem-solving is the most important aspect of acting
intelligently. Unless we solve a problem correctly, the best Decision-Making ability will only
produce mediocre results. The quality of problem-solving depends on being prepared and
adopting the appropriate attitude. Providing excellent problem-solving can be summarized as
follows:
• Use all relevant knowledge -- Obtain the best insights into the situation, locate the best
applicable expertise, and find the most promising ways to approach or handle the problem.
Pattie wanted to change the practices for expediting customer orders. She decided to
involve people from manufacturing, sales, information systems, industrial engineering,
and management sciences. In working with the problem, she was amazed and delighted
when it emerged that instead of finding a quicker way of expediting, perhaps with more
expediters, they needed to improve coordination between order taking, parts procurement,
and manufacturing scheduling, thereby abolishing the expediting function altogether.
• Consider all readily accessible information but use only what is relevant -- Obtain
correct analysis of the situation and avoid being overwhelmed by irrelevant and
misleading details. Good judgments and hypotheses of underlying causes may be
necessary.
Saul was asked to investigate the variability in scheduled vs. actual arrival times of
42 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

crude shipments to the refinery. He was given a mountain of information on scheduled vs.
actual arrivals over the last three years including names and owners of tankers, their size,
speed, building years, and so on. He also received earlier analyses that were inconclusive
in spite of their comprehensiveness. Saul noted that none of the analyses considered
weather underway and decided to pursue that issue. True enough, he found that varying
weather conditions explained almost all variations in arrival times.
• Reframe the problem and consider different perspectives -- Do not accept the initial
view-point as the only valid one. Investigate other perspectives.
Fran was concerned that the effectiveness of her department was less than ideal. She
first examined the work flows to determine if there were problems. The flows seemed
adequate for performing the tasks and activities required. Next she looked at the
information flows with the same result. She still was not satisfied and explored if people
had the appropriate expertise. That also seemed adequate, although not as convincing.
She then turned to a broader look at the deliverables from her department from an overall
and a value-added point of view. Here she found that there were misplaced emphases on
work that had little value-added and several cases of less emphasis on work with high
customer value.
• Be imaginative, innovative, and creative -- at all times -- Generate the best and most
effective approaches to deal with the situations at hand -- even if it requires breaking with
tradition.
Dave had a new design for a revolutionary chemical analyzer. His firm needed outside
contractors to furnish costly key components but he did not have the funds to procure
them in the traditional ways. After some soul searching, Dave got the idea that he might
be able to invite the two key contractors to join a consortium that would market the
analyzer, have his company manufacture it, lease the design from him, and compensate
the partners from sale proceeds. He drew up plans, agreed on terms, created the
partnership, and was able to bring the analyzer successfully to market.
• Analyze situations beyond what is apparent at the surface -- beneath symptoms --
Find and address the root causes and subsequently develop approaches to deal with
situations in ways that will be effective and lead to the desired results.
Kim is asked to look into deteriorating worker morale in the upstate plant. Workers tell
her of unfair scheduling and work assignment practices, favoritism, dirty and unpleasant
working conditions, and other “nit-picking” issues. Kim thinks there are deeper issues
and starts to investigate. She finds there is little or no worker involvement. Workers feel
left out, their suggestions and ideas are not listened to, they are not informed about
management actions, company difficulties or successes, and they are given no
understanding of what is happening. After changing these conditions the workers feel
involved and morale problems gradually disappear.
• Discriminate and categorize -- Provide clear insights into the nature and structure of the
situation and develop patterns and relations to prior categories and to pertinent reference
cases, scripts, and schemas.
Jim diagnoses the rotary compressor that has shown potential signs of wear. He
records vibrations, bearing temperatures, and other measurements. As he works, he sees
that the vibrations seem similar to an earlier situation where one blade had been
damaged. He also identifies that the oil pressure fluctuates and is lower than normal.
Some Knowledge Management Concepts 43

Concluding that there likely is a bearing wear in addition to blade damage or obstruction,
he decides to shut down and open the compressor for repair.
• Reason rationally and make few errors -- Be reliable and efficient and prevent making
false conclusions and other mistakes.
Sally invests DregCo’s short-term funds. At 9:30 she has four offers to place her funds.
One is very attractive but will only take part of her investment. Another is with her good
friend Tom, but is not all that attractive. Yet another offers good interest but is only
interested if they can have her whole investment. The last offer is better than Tom’s but
not all that good, but at least they are willing to take a partial placement. Sally runs the
numbers and although she would like to give Tom some of her business, she decides to
place her funds with the first and last parties to maximize DregCo’s returns.

Make Outstanding DECISIONS

As we discuss in Chapter 8, making outstanding decisions is complex as it involves (a)

assessing how acceptable the expected outcomes will be for different alternatives; (b) making
difficult tradeoffs when more than one objective need to be satisfied, resources conflicts, or
when new directions and important changes are introduced by the decision. Making
outstanding decisions can be summarized as follows:
• Accept the challenge and take charge -- Understand the challenge and the implications
for accepting it and proceed to pursue it.
Ned is authorized to contact a major client and assemble a bid for the suggested work.
At first he does not know how to approach the situation and talks to his associates to learn
what is involved. After he has satisfied himself that he will be able to perform the work
satisfactorily, he accepts the authorization and visits the client to start the process.
• Identify the objectives behind a situation -- Take into account all relevant perspectives
for assessing the utilities of the different alternatives.
Jane is about to decide on the price to quote on a long-term bulk chemicals contract.
She would like to get the contract but would not like to start a price war by quoting too
low. Whereas her company has an excess of products now, she knows that it may have
shortages next year. Jane thinks through the situation and decides that long-term
profitability is more important than bringing in a sale at a marginally low price.
• Consider all relevant alternatives -- Ascertain that the best approach is found or created.
Ted struggles to structure his manufacturing organization. He thought it would be a
good solution to copy the traditional structure in his last job. After discussing with OD
people and managers who run successful organizations, however, he realizes that other
options may be better. Eventually, Ted makes several organization models, one
traditional hierarchy, one matrix organization, several task-focused models, and a flat
model patterned after Gore Associates.
• Consider consequences -- Ascertain that for each relevant alternative, first- and higher-
order positive and negative consequences are identified and characterized to the extent
time and resources permit. Establish whether negative consequences fall within
acceptable limits.
Tessie explores locations for a new store. She has made a list that she uses for each
44 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

potential site. It includes projections for development costs and schedule, potential
number of daily customers, average purchase per customer, expected image, and other
variables that she thinks are relevant.
• Set priorities -- Identify where to focus, what to set aside, and resolve conflicts between
resource constraints.
Mark has many issues on his plate. Specifically, his laboratory is responsible for
quality control in the plant, he is responsible for keeping plant effluents below
environmentally acceptable levels, he checks incoming shipments for quality, and he
assists the instrumentation people with difficult problems. He is also short-handed and
cannot do all that is asked of him. Mark decides that the most important thing is to make
quality products. Second priority is to keep effluents below legal limits.
• Check the reality of the best alternatives -- Ascertain that assumptions are acceptable
and that no avoidable or unacceptable errors are made.
Mary-Jo has developed options for scheduling the maintenance crews. She has had to
create several alternatives to reflect various incompatible requests while trying to
maximize the expertise on-site for each prime shift without leaving crucial night shifts
vulnerable. After discussing the options with the maintenance superintendent, she
presents her best three alternatives to the plant engineer and the union steward to explore
if they break rules or set up precedencies while providing desired coverage.
• Select the best alternative considering all constraints, objectives, and uncertainties --
Choose the decision that promises the outcome with the best trade-off between desired
performance and undesirable effects (“costs”) and with as little risk as possible (fulfill
relevant objectives to the highest degree).
Hollis has worked out two alternatives for replacing the aged in-house information
system. One is to retain the mainframe-terminal/PC architecture which will allow
gradual and almost invisible transition, continued use of much of the software, and will
end up costing less. However, it will also continue many -- if not most -- of the present
limitations and may have to be replaced within five years. The second alternative is to
migrate to a peer-to-peer architecture and create new object-oriented software to reflect
new and desired operating practices. This alternative will cost much more and take
longer to implement, but will strengthen the ability to manage the organization and have
the flexibility to adapt to changes for a long time. Weighing all pros and cons, Hollis
decides to be proactive and select the second, more ambitious alternative.
• Communicate decisions clearly and convincingly -- Ascertain that decisions and
resulting actions will be understood and accepted and that their implementations will be
successful.
Ellie has made the decision to change the budgeting process. In the past, it has mainly
focused on costs and financial performance. While that is important, she has decided that
it resulted in “milking-the-cow” attitudes and has taken away the badly needed focus on
continued renewal to remain the leader in their market. Ellie has worked out a detailed
rationale for her decision and prepared a “how-to” document that provides a general
schema for how she sees the new process being conducted. She has discussed the new
direction with almost all those concerned over the last months and now gathers all her
VPs and directors for a one-day session to discuss, get feedback, and fine-tune before
issuing the new guidelines.
Some Knowledge Management Concepts 45

• Implement decisions effectively -- Assure efficient and timely implementation with

support by adequate resources to interact properly with other activities and to meet
objectives.
Erik has decided that his company must develop a new model of its portable inventory
scanner. To do this well, the development project must raid experts and funding from
other areas that also need them. Erik sits down with the manager of the new project and
plans an aggressive project schedule in considerable detail. The plan outlines all
resources needed and points directly to conflicts with other activities. Recognizing the
interconnections, Erik meets with each program manager to work out how they may be
able to accommodate the required changes. Having completed the plan, he authorizes all
changes and initiates weekly reviews of both the development project and all the affected
activities to follow progress and to provide assistance where needed.

STAR PERFORMERS ALSO ACT INTELLIGENTLY

Robert Kelley and Janet Caplan1 suggest nine characteristics for knowledge workers who
perform exceptionally well, “star performers.” As a result of their work at Bell Labs, they
assembled these characteristics in the form of an expert model for engineers. The factors are
listed in order of importance:
1. Take Initiative -- Accept responsibility above and beyond stated job, volunteer for
additional activities, and promote new ideas.
2. Network -- Obtain direct and immediate access to coworkers with required expertise and
share own knowledge with those who need it.
3. Self-Manage -- Regulate own work commitments, time, performance level, and career
growth.
4. Teamwork -- Assume joint responsibility for work activities, coordinate efforts, and
accomplish shared goals with coworkers.
5. Leadership -- Formulate, state, and build consensus on common goals and work to
accomplish them.
6. Followership -- Help the leader accomplish goals and think for yourself rather than rely
solely on managerial direction.
7. Perspective -- See your job in its larger context and take on other viewpoints like those
of the customer, manager, and work team.
8. Show-and-tell -- Present ideas persuasively in writing or oral form.
9. Organizational savvy -- Navigate competing interests in an organization, be they
individual or group, to promote cooperation, address conflicts, and get things done.
As illustrated in Table 2-2, there is a fair relationship between these factors and the
characteristics identified for intelligent-acting behavior. A few of the characteristics show
little or no correspondence to any of Kelley and Caplan’s factors, while others have a strong
correspondence.

1Kelley & Caplan (1993), “How Bell Labs Creates Star Performers.” Harvard Business
Review, July-August 1993, pp. 128-139.
46 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

What Does It Mean to “Work Smarter?”

We are often told that to be more productive and effective, we do not necessarily have to
work harder. Instead, we should work smarter! However, it is not always clear what that
entails although we immediately will recognize that it is one aspect of acting intelligently.
We all sympathize with the notion and believe that it is the appropriate direction to strive
for. We need, however, to develop concrete concepts for this notion, particularly since it
typically requires careful attention to the knowledge required to work smart! We need to
manage knowledge actively to really work smarter.
Working smarter is particularly important in our increasingly competitive environment.
Advanced and widely adopted management methods such as Dr. Deming’s total quality
management approach1 assist in improving operations. Many of the concepts promoted by
these methods require smarter, not harder work, at all levels of the organization.
Working smarter typically means that we must approach our tasks with greater expertise --
that we must acquire as much relevant and high-quality knowledge as possible and apply it
better in a number of different ways.
Said differently, working smartly involves making use of all the best knowledge we have
available. In order to identify how improved management of knowledge can assist us in
working smarter, we will examine some general aspects of this concept as it applies to
manufacturing and service organizations. Representative examples have been divided into
five areas:
1. Improve Task Organization and Workflow
2. Coordinate with Suppliers and Customers
3. Improve Use of Knowledge
4. Improve Knowledge Building
5. Improve the Work Function -- Improve System of Production and Service
The knowledge worker’s work products cover a broad range. At one end, work products
may involve manipulating physical objects (such as shaping machine parts or assembling
circuit boards), at the other end it may include decisions on managing complex situations and
plans for implementing them.

1 See for example Deming (1986), Walton (1986), and King (1987).
Some Knowledge Management Concepts 47

Table 2-2. Kelley & Caplan’s Intelligent-Acting Factors and Characteristics.

Take Initiative Teamwork Perspective
Network Leadership Show&Tell
Self-Manage Followership Org. Savvy
Exhibit effective PERSONALITY TRAITS:
Show initiative and responsibility ..... ... xx ... xx ... x x x ... x
Adopt behavior suitable to the situation .. .. ... ... xx ... ... ... ... ... ...
Think before acting ................... ... ... x ... ... ... x ... ...
Be flexible and responsive ............... ... ... ... x x x x ... ...
Be persistent ........................ ... ... ... ... x x ... x ...
Be a good listener ..................... ... ... ... x ... x ... ... ...
Think independently ................... x ... xx ... xx xx x ... ...
Be idealistic and principled ............... x ... ... ... x ... ... ... ...
Be willing to self-correct ................ ... ... x x x x ... ... ...
Be well PREPARED:
Acquire knowledge, build integrated wholes x x ... ... x ... ... ...
Be versatile ......................... ... ... ... x ... ... ... ... ...
Be informed ......................... ... ... ... ... ... ... ... ... ...
Create new and important perspectives .... x ... ... ... x ... xx ... ...
Understand the surrounding world . . . . . . . . . . . ... ... ... ... x ... x ... ...
Choose appropriate TACTICS:
Anticipate future developments -- plan xx ... x ... x ... ... ... ...
Invest according to situation’s importance .. x ... ... ... x ... ... ... x
Coordinate with relevant parties ... x ... ... xx ... ... x xx
Take relevant actions when appropriate ... . xx ... ... ... x x ... ... ...
Provide excellent PROBLEM-SOLVING:
Use all relevant knowledge ............... x x ... ... ... ... ... ... ...
Consider all readily accessible information x x ... ... ... ... ... ... ...
Reframe problem w. different perspectives . . . x ... ... ... ... ... xx ... ...
Be imaginative, innovative, and creative .. . xx ... ... ... ... ... x ... ...
Analyze situations beneath symptoms . . . . . . . ... ... ... ... ... ... xx ... ...
Discriminate and categorize .............. ... ... ... ... ... ... ... ... ...
Reason rationally and make very few errors ... ... ... ... ... ... ... ... ...
Make outstanding DECISIONS:
Accept the challenge and take charge . . .. . . xx ... ... ... xx x ... ... x
Identify the objectives behind a situation . .. ... ... ... ... ... ... x ... ...
Consider all relevant alternatives . . . . .. . . . ... ... ... ... ... ... x ... ...
Consider consequences ................. ... ... ... ... ... ... x ... x
Set priorities ........................ x ... x ... xx x ... ... x
Check reality of the best alternatives ..... ... x ... ... ... ... ... ... ...
Select best alternative .................. ... ... ... ... ... ... ... ... ...
Communicate decisions convincingly . . . . . . . . ... x ... ... xx ... ... xx ...
Implement decisions effectively . . . . . . . . . . . . x x ... ... x ... ... x xx
Legend: “xx” -- Direct correspondence; “x” -- Indirect correspondence; “...” -- No correspondence.
48 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Improve Task Organization and Workflow

Systematize -- to make work at hand as easy and efficient as possible by taking advantage
of effective and well understood methods and approaches. Wherever, and whenever, know
what to do and how to do it!
Requires: In-depth understanding of available methods for performing the work in
question with judgment about strengths, weaknesses, requirements, and capabilities of the
different methods.
Organize workflow -- to reduce the number of tasks that need to be performed in order to
generate the desired work products.
Requires: Knowledge of alternatives for generating the work products. Knowledge of
how to systematize and organize work-flows.
Minimize interruptions and “work task fragmentation” -- to maximize efficiency and
minimize the time and costs involved in putting one work task aside and restarting another.
Requires: Knowledge of how and where to redirect potential interruptions, of priorities
and scheduling of events to minimize interruptions.
Wherever possible, perform work tasks when all required materials and all resources
(and information) are at hand. In this way, each task can be completed once started, thereby
minimizing work task fragmentation and set-up costs while maximizing utilization of
resources.
Requires: Knowledge of resources and materials required and when they are needed to
schedule operations. Information on when resources and materials can be expected.
Perform work tasks as close to the “point-of-final-use” and the “time-of-maximum-
advantage” as possible to minimize:
-- transport of the work product to reduce damage, deterioration, or loss
-- loss due to translation and interpretation as work product is passed from party to party
(by being able to communicate through as short a chain as possible)
-- the need by customers to wait for the work product -- or conversely -- if delivered too
early, minimize the need to hold it in, and later retrieve it from, storage
-- costs of extra handling
-- opportunity costs by not having work product available when needed
Requires: All knowledge needed to perform work tasks under normal -- and to some
extent nonroutine and critical -- conditions. Knowledge of where to obtain external
knowledge and resources to perform tasks under abnormal, critical conditions.
During slack periods, perform any work available -- to maximize resource utilization and
peak-demand resource availability at later times.
Requires: Knowledge of how to perform alternate work tasks (i.e., work flexibility).
Knowledge of reorganizing workflows and work schedules. Information on work
available to be performed and future work to be expected.
Organize work resources -- to maximize their availability and usefulness for performing
Some Knowledge Management Concepts 49

the work function.

Requires: Knowledge of requirements for resources under both normal and abnormal
(rare, but critical situations) conditions. Knowledge of how to systematize the work
environment and how to organize resources.
At all times manage work environment -- to ensure that all workaids, tools, and related
support functions are in good working order and make corrections as required and within
capability.
Requires: Broad knowledge of fundamentals of support functions and workaids in terms
of their basic organization and detailed configurations. Knowledge of diagnostic methods
and approaches to making corrections -- general and specific -- to the work environment.

Coordinate with Suppliers and Customers

Whenever it is possible “at no expense,” make work products more useful and
acceptable. Communicate quickly and helpfully with customers about improvements and if
problems within own work function will affect them.
Requires: Knowledge of what customers need and how they use work products -- directly
and indirectly (i.e., how the work product fits into and supports customers’ products).
Communicate with customers -- to have them help make own work products better suited
for customers’ work function.
Requires: Knowledge of own work function requirements and of what customers need
and how they use the work product -- directly and indirectly (i.e., how the work product
fits into and supports customers’ products).
Communicate with suppliers -- to help them make their work products better suited for
own work function. Communicate quickly, constructively, and clearly to suppliers if there are
problems with their work products.
Requires: Knowledge of own work function and suppliers’ operations.

Improve Use of Knowledge

Reduce errors and substandard work -- to eliminate rejects, rework, and problems for
customers - inside and outside the organization.
Requires: Knowledge of how to perform the work tasks and of how to judge the quality
of performed work. Knowledge of how the work products are used by the customer.
Pool knowledge and make use of all relevant knowledge sources.
Requires: Knowledge of requirements of own work function under all conditions and of
where to find complementary expert knowledge and how to make it available.
Use the best knowledge available -- to anticipate problems and prevent them.
Requires: Knowledge of “what can go wrong” and how to handle undesirable situations.
Also requires deeper knowledge of the tasks, work objects, and resources in own work
function and suppliers’ work functions.
Make all authorized decisions as long as expert knowledge is available to make them
50 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

right. Consult with experts if authorized decisions require additional knowledge -- but only
then.
Requires: Knowledge of how to perform the work tasks and how to judge the correctness
and quality of performed work.

Improve Knowledge Building

Organize knowledge -- to maximize its availability and usefulness for performing the
work function under normal and abnormal (critical) situations.
Requires: “Knowledge of knowledge” and “thinking about thinking” (including meta-
knowledge),1 what organization of knowledge means, what options are useful, how to
arrange knowledge for different purposes and uses, and how to integrate knowledge with
other sources and knowledge bases -- with and without information technology.
Learn as much as possible from the work experience and implement all innovations as
quickly and efficiently as possible.
Requires: Knowledge to observe, abstract, and select new knowledge critically.
Knowledge of principles behind the work process and both practical and theoretical
aspects of adjacent functions and work processes. Knowledge of the purpose and
operation of the whole enterprise.
Share all new knowledge and innovations with all others who are performing the same
or similar kinds of work -- to enable them to work as effectively as possible.
Requires: Knowledge of how to organize and document innovation and new knowledge
and make these assets available to others. Incentives to share.
Collaborate and network with others -- to gain access to the best knowledge possible and
to provide expertise to others when needed.
Requires: Knowledge of “who knows what.” Knowledge of what is required to perform
the work function. Knowledge of how to work together. Incentives to work together.

Improve the Work Function -- Improve the System of Production and Service2

Investigate constantly the source of malfunctions and product or service problems -- to

identify opportunities for improving the system.
Requires: Knowledge of operational principles of work function and adjacent work
functions. Knowledge of the organization’s intents, objectives, and plans. Knowledge of
how to characterize problems and potential solutions.
Identify, whenever possible, requirements for -- or practices of -- work that is

1A discussion of meta-knowledge can be found in Shapiro (1987), page 598-603.

2 Some of these perspectives come from Dr. Deming’s management method (Deming, 1986).
In particular, these perspectives are in support of Dr. Deming’s fifth point for management:
“Improve constantly and forever the system of production and service, to improve
quality and productivity, and thus constantly decrease costs.” from Deming (1986), p. 23.
Some Knowledge Management Concepts 51

unnecessary and wasteful within own or adjacent work functions -- to propose alternatives
for changing requirements or practices.
Requires: Knowledge of application of work products and principles of operation of own
and customers’ work functions and of characterizing problems and potential solutions.
Observe and analyze how well products and services match customer requirements -- to
identify and conceptualize how they can be improved.
Requires: Knowledge of customer requirements and reconceptualizing work products.
Automate or delegate all routine tasks and all other tasks that are sufficiently well
understood to be handled by less qualified agents.
Requires: Knowledge of how work is performed and competent task execution.
The underlying thesis of “working smarter” is that implementation of these and many
additional approaches will improve the performance of the organization as a whole. Active
KM and a corresponding framework will support these and other ways of working smarter by
making available the required knowledge and organize it to suit the work function and
context, thereby assisting in improving the organization’s performance.
We have just identified over 20 examples of ways to work smarter, and many more may
be added. It should be quite clear, therefore, that we cannot walk around with a checklist of
which smart-working approach to focus on next. Instead, working smarter must become a
way of life. This requires additional understanding on the part of all knowledge workers
involved. In addition, it requires an active KM practice with a coherent and well-
implemented framework.

A Model for Building and Using Knowledge

When we build and use knowledge, as individuals or as organizations, we perform these
functions by executing many subordinated activities in several distinct steps, and often as
independent tasks. In this book, at times we consider these steps independently, at other times
we consider them together as larger tasks. We also use and build knowledge in many
different ways and with many different methods depending on the purpose and the conditions
under which we work. A model for how we build and use knowledge, therefore, must be both
flexible quite specific as to how different needs can be met. We will only treat a few aspects
of the potential variants of the models for building and using knowledge.
The model that we present serves four major functions: (a) building knowledge; (b)
holding knowledge; (c) pooling knowledge; and (d) applying knowledge. In the model, we
portray the individual functions and activities as if they were sequential steps. That, however,
is a simplification since we may perform some of the functions and activities in parallel. We
may also cycle back to repeat functions and activities performed earlier, but now with
different emphasis and detail in an iterative fashion.
52 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

ILLUSTRATIVE EXAMPLES OF BUILDING AND USING KNOWLEDGE

The basic model for how knowledge is built and used is illustrated in Figure 2-2 and
presented in Tables 2-3, 2-4, 2-5, and 2-6. As shown we are concerned with a broad range of
knowledge-building activities such as learning from all kinds of sources. Similarly, we are
interested in holding knowledge in people’s minds, books, computerized knowledge bases,
and any other relevant form. Pooling knowledge can also take many forms -- from
discussions over the water fountain to expert networks, to work team. Similarly, using
knowledge can be achieved in many ways depending on the situation.
In this model, we have integrated fundamental functions and detailed activities from the
different domains of individual and organizational knowledge building and use.
Theoretically, these functions may be similar. In practice, however, they are quite different.
Organizational learning and knowledge use are achieved both through individual people
and through aggregated events, such as when a joint venture is undertaken to import
knowledge or when a new product is defined and produced to make use of broad and valuable
expertise within the organization.
The model focuses on identifying and relating the functions and activities that we engage
in to make products and provide services as knowledge workers. Other uses of knowledge are
also of interest, such as when we sell knowledge or technology (as specific manifestation of
knowledge) directly to a buyer. However, these uses of knowledge fall outside the model as
presented here. To add further insight into the concepts behind this model, we illustrate
below how knowledge may be built, held, pooled, and used.
Value-Buy is a large retailer that has numerous department stores each selling thousands
of different kinds of items in many lines of merchandise. New products are constantly
introduced and consumer preferences are changing as a result of these and other factors.
A new line of merchandise is considered for introduction by Value-Buy. In order to learn
more (i.e., build additional knowledge) about its potentials Dana Stint, the marketing
manager in charge of the project, decides to undertake a market research study. To
obtain knowledge about the potentials of the line, Dana surveys a sample of consumers by
using focus groups to create new knowledge about their preferences; she hires a senior
professional from a competitor to import knowledge, and she test markets the line in a
Midwest store to observe how it performs in the real world.
Some Knowledge Management Concepts 53

Figure 2-2. Model for Building, Holding, Pooling, and Using Knowledge.
Legend
Intelligence
Knowledge Flow from all
Information Flow Learning sources
from
Workflow Personal
Media
Experiences
Build
Computer-
Knowledge Based
Books Training &
Education
Knowledge-Building Formal
Education
Domain and
Training

Hold
Knowledge
Books

Pool
KBS People

Pool
Knowledge
Knowledge
Base

Knowledge-Use
Domain
Work
Use Object
Knowledge Work
Function
54 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Illustration of Knowledge Building. (Table 2-3)

Table 2-3. Model for BUILDING Knowledge with Examples of Activities.

Major Fundamental Examples of Examples of
Function Functions General Activities Specific Activities
Build Knowledge -- Learn
• Obtain Knowledge
- Create New Knowledge
.. Research & Development projects
.. Innovations by individuals to improve the way they perform their tasks
.. Experimentation
.. Reason with existing knowledge
- Import Knowledge from Existing Sources
.. Elicit knowledge from experts
.. Acquire knowledge from procedure manuals, books, and other documents
.. Engage in joint venturing to obtain technology
.. Transfer people between departments
- Observe the real world
.. Follow behavior of the chemical process after a change has been made
• Analyze Knowledge
- Extract what appears to be knowledge from obtained material
.. Analyze transcripts and copy statements about new concepts, etc.
.. Listen to explanation and select new concepts for further consideration
- Abstract extracted material
.. Abstract new information to find potential underlying knowledge
- Identify patterns in extracted and abstracted material
.. Describe and estimate behavior resulting from changing conditions
- Explicate relations between apparent Knowledge Elements, Fragments, and Atoms1
.. Determine how causes and symptoms relate to particular diagnoses
- Verify that extracted and transformed material corresponds to material
.. Check that observed process operating behavior agrees with physics

When Dana has assembled all inputs, she and her team start to analyze what has been
learned by extracting and abstracting important and salient aspects of the collected
information to identify patterns in preferences and potential relations to consumer
behavior. They synthesize the lessons-learned by generalizing observed patterns and
relations to hypothesize potential consumer behaviors. They verify the hypotheses and
test them to verify that they represent valid concepts. They reconstruct valid hypotheses
and relations into a coherent and consistent model. They combine and corroborate the
new insights with what is previously known to consolidate the knowledge into a congruent
whole.

1 Knowledge Elements, Knowledge Fragments, and Knowledge Atoms are different

categories in the Knowledge Detail dimension as indicated in Table 4-1E.
Some Knowledge Management Concepts 55

Table 2-3. Model for BUILDING Knowledge with Examples of Activities (cont.).
Major Fundamental Examples of Examples of
Function Functions General Activities Specific Activities
• Reconstruct (Synthesize) Knowledge
- Generalize analyzed material
.. Generalize observed customer behavior to obtain broader principles
- Generate hypotheses
.. Explain customer behavior in terms of several causal factors
- Establish conformance between new and existing knowledge
.. Corroborate validity of new knowledge in light of what is already
known
- Update total knowledge pool by incorporating new knowledge
.. Discard old, outdated, and false knowledge
• Codify and Model Knowledge
- Represent knowledge in our minds
.. Build mental concepts about cashflow forecasts
- Model knowledge
.. Assemble declarations and relational statements into coherent model
- Document knowledge in books and manuals
.. Write commercial loan procedures and requirements manual
- Encode knowledge into knowledge bases
.. Enter knowledge on customer service into computer using KBS tool
• Organize Knowledge
- Organize new knowledge for specific uses
.. Sequence KBS consultation dialog and knowledge base for diagnostics
- Organize new knowledge according to established framework
.. Categorize knowledge on economics according to academic standards

The knowledge Dana and her team have gathered is organized to serve as support for the
merchandising operation with explication of expectations to provide judgments for
monitoring performance and managing local customer response. Finally, the new
knowledge is documented and encoded into a set of training materials and reference
manuals for use in the field.

Illustration of How Knowledge May Be Held. (Table 2-4)

A metals company specializes in making high-performance alloys for numerous

purposes. To become a leader, it has conducted extensive research and developed many
proprietary recipes and methods for making the products. It has built an impressive
body of knowledge in this area and is considered to be the best in its field.
The company has cumulated its knowledge in this field over a long period and holds it in
many forms. Some are quite permanent, some are transitory and even vulnerable to loss.
Some of the knowledge is documented and held as research reports and technical papers,
some is held as production recipes, operating procedures, and established practices,
while some is not documented directly, but alluded to “by reading between the lines” of
many of the reports and papers.
56 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Table 2-4. Model for HOLDING Knowledge with Examples.

Major Fundamental Examples of Examples of
Function Functions General Activities Specific Activities

Hold Knowledge
• Remember Knowledge
- Retain knowledge as an individual
.. Internalize knowledge about new economic forces in marketplace
• Cumulate Knowledge in Repositories
- Create a computer-resident knowledge base
.. Encode and add knowledge about new government regulations
• Embed Knowledge in Repositories
- Embed knowledge in procedures
.. Write procedures manuals
• Archive Knowledge
- Create a scientific library
.. Subscribe to CHEMICAL ENGINEERING PROGRESS for reference
- Retire older knowledge from active repository
.. Store old reports on microfiche for potential retrieval

Other parts of the knowledge may be embedded into databases. A particular knowledge
segment has been elicited from experts and modeled and encoded into the knowledgebase
of a system to be available for later consultation and pooling of knowledge. Some,
perhaps the major part, of the higher-level and general knowledge and certainly the vast
majority of the detailed know-how is held in the minds and memories of experts who
know particular aspects of the field and know the practical aspects of making and
developing specialty alloys with different properties.
All this knowledge is held by the organization in documented or automated repositories
or in people to be available for future uses -- to make alloys for customers, to develop
new alloys, or to continue to create new knowledge about alloys through research and
development. Ideally, the knowledge should be available for each new application and
customer situation.

Illustration of How Knowledge Can Be Pooled. (Table 2-5)

Tracy Smith is a young commercial loan officer in a large bank who works with a small
service company to determine the magnitude of the credit line they can be given. She
finds that the service company has significant market strengths and opportunities, but
also shows some severe internal weaknesses. She feels that the situation is beyond her
present knowledge and decides to pool her own knowledge with knowledge from the
bank’s experts and other sources.
She first consults the bank’s reference manuals, and then consults the bank’s computer-
based Commercial Loan Advisor expert system (a knowledge-based system). Still not
satisfied that she can determine the credit line and the associated risks, she consults with
her manager and the bank’s commercial loan expert to obtain their judgments and
insights.
Throughout this process, Tracy has organized the information about the case and
Some Knowledge Management Concepts 57

documented it in a structured format. This organization permits efficient and insightful

consultation with the experts and helps them apply their judgment directly and in a
familiar format without having to reorganize their knowledge and perspectives to fit the
situation.

Table 2-5. Model for POOLING Knowledge with Examples.

Major Fundamental Examples of Examples of
Function Functions General Activities Specific Activities

Pool Knowledge
• Coordinate Knowledge
- Form collaborative teams to work with a particular situation
.. Plan work program and contributions for the collaborative team
- Create “Expert Access Networks”
.. Identify “who knows what”
• Assemble Knowledge
- Gather knowledge sources
.. Assemble background references from libraries and other repositories
.. Organize a focus group session
• Access and Retrieve Knowledge
- Consult with knowledgeable people about a difficult problem
.. Obtain a second opinion from an expert
.. Discuss difficult case with a peer
- Obtain knowledge directly from a repository
.. Use a KBS for advice on how to perform a tax audit
.. Read a scientific article on how to diagnose and treat an illness

Illustration of Applying Knowledge. (Table 2-6)

José Fountain is an expert mechanic who encounters an unusual and critical problem in
the form of a broken bolt inside the transmission he is repairing. When he finds the
broken bolt, he decides that the scope of his task, and hence his responsibility, covers
repairing not only the main fault in the transmission but also any ancillary problems,
such as the safe removal and replacement of the bolt while determining why the problem
occurred in the first place.
José approaches the problem by gathering information to diagnose the situation as he
examines the bolt remnants and uses his knowledge to analyze what he sees. As he
analyzes, he also synthesizes options for how to attack the problem with the tools he
knows are available and other options that he knows about. After having gone through
this process, he decides what his best option is and proceeds to implement it by executing
the subtask of fixing the problem with the broken bolt. He removes the bolt remnant in a
way that leaves the internal threads undamaged, and he can now proceed to implement
the other subtasks.
58 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Table 2-6. Model for APPLYING Knowledge to Work Objects with Examples.
Major Fundamental Examples of Examples of
Function Functions General Activities Specific Activities

Apply Knowledge
• Use Established Knowledge to Perform Routine Tasks - Make Products
- Make standard products
.. Repair transmission by replacing worn parts and reassemble
- Provide standard services
.. Advise novice customer on precautions for use of standard product
- Use “Expert Access Networks”
.. Have an expert perform special subtask outside prior experience
• Use General Knowledge to Survey Exception Situations at Hand
- Inspect situation to determine what the problem is
.. Examine transmission to see if additional damage has occurred
• Use Knowledge to Describe Situation and Determine Scope
- Identify and describe the problem and how it should be handled in general
.. Examine company for strengths and weaknesses to narrow problem
• Select Relevant Special Knowledge to Handle Situation
- Identify knowledge sources for expertise to handle the special situation
.. Decide to consult with KBS and manager on commercial loan
• Observe and Characterize Situation with Special Knowledge
- Examine situation and organize observations to conform with knowledge perspectives
.. Collect and organize information about loan situation
• Analyze Situation with Knowledge
- Determine patterns of situation and compare with known situations and conditions
.. Judge if the internal threads of the bolt hole can be rescued
• Synthesize Alternative Solutions with Knowledge
- Identify standard options and create new solutions
.. Outline different ways in which the broken bolt may be removed
• Evaluate Potential Alternatives using Special Knowledge
- Appraise advantages and disadvantages of all interesting alternatives
.. Determine risks and benefits of each alternative
• Use Knowledge to Decide What to Do -- Which Alternative to Pursue
- Select the most efficacious alternative
.. Rank alternatives and choose the one that is best all around
- Reality check -- test that the chosen alternative meet all criteria
.. Verify that the chosen credit limit is acceptable to bank management,
is within bank guidelines, can be served with the company’s
cashflows as estimated by the bank, and can be secured by the
company’s assets
• Implement the Selected Alternative
- Execute the tasks associated with implementing the alternative
.. Choose and assemble tools and proceed to remove the bolt remnant
.. Prepare implementation plan, distribute it, and authorize team to proceed

With less knowledge, the mechanic may well have destroyed the threads and made the
situation worse. As the expert works with these kinds of problems, he often encounters
situations that are different from what he has experienced in the past. By transferring
his skills to the new situation, he can learn new approaches and obtain new knowledge
that he can hold for future reference. He may also decide that there are smarter ways of
Some Knowledge Management Concepts 59

attacking the situation, in which case he may innovate and create new ways of
performing the basic tasks and create new knowledge.
When we apply knowledge to the work objects, we approach routine and standard tasks
differently from the way we approach difficult and unusual tasks. As we gain proficiency,
routine and standard tasks are typically performed using “compiled” knowledge that we
access and use automatically and nonconsciously. That is, we are not aware of how we attack
a situation and get the work done.
Difficult tasks are performed in a more deliberate and conscious manner. In difficult and
unanticipated situations, knowledge workers cannot use automated knowledge except for the
particular areas where they either have previous experience or where they decide to handle the
situation as if it were identical to a routine situation.
As indicated in Table 2-6 and in the expert mechanic example above, when people
encounter a difficult situation, they use their knowledge to proceed through a set of steps to
identify what the problem is, what the alternatives are, which alternative to choose, and then
to implement their choice -- the decision. When required, the knowledge worker may repeat
these steps and revisit previous steps as conditions change or as new information is
uncovered.1 These aspects of reasoning, problem-solving, and decision-making will be
discussed in greater detail in later chapters.

Critical Knowledge Functions

Knowledge-intensive activities (KIAs)2 are always accompanied by critical knowledge
functions (CKFs). These are situations that might offer highly valuable opportunities for
improving knowledge work -- in operations, products, customer service, or in other important
functions -- by changing the way knowledge is handled and managed.
CKFs are business functions that typically involve knowledge-intensive work that cannot
easily be performed by available substitute personnel or be readily automated. These
functions are critical to the operation of an organization for several reasons. For example,
they may be critical because the value-added contributed by the knowledge applied to the
work products in the function is important to the successful operation of the organization.
They may be critical because of an unexploited potential, such as when valuable and
applicable knowledge is available but is not utilized. Further, CKFs may be critical because
the knowledge needed is in short supply or is not well known -- in general or to the
knowledge workers at the point-of-use -- or because the knowledge is vulnerable as when
only one person holds it and that person is in line to being promoted, close to retirement,
planning to leave, etc.

1 This model is influenced by, and to a large extent follows, Simon’s decision model (1977).
2 Knowledge-intensive activities are discussed in Chapter 8 in the section “Knowledge-
Intensive Work and Outcome-Oriented Activities.”
60 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

CKFS -- WHAT ARE THEY?

Availability and proper use of knowledge and expertise are crucial for proper and
desirable operation of a business function. Often opportunities present themselves for
modifying the way knowledge is managed to improve an operation, but in most companies, it
is often difficult to identify where these opportunities are, what the proper alternatives are to
improve them, and what the costs and benefits of such changes may be. In many situations,
managing knowledge in various ways may lead to possibilities for large strategic benefits and
economic gains or to opportunities to prevent undesirable conditions from occurring.
Critical knowledge may be considered from different perspectives. Broadly, critical
knowledge involves all knowledge areas that are required to operate and conduct a business.
Examples of such knowledge include: management knowledge, knowledge of the
technologies used in the company, knowledge about the organization’s facilities, equipment,
production processes, and knowledge of its customers and suppliers. More narrowly, since it
is impossible to consider all critical knowledge areas in organizations of any size, managers
are first interested in finding the critical knowledge areas that need immediate and high-
priority attention. Identification of, and management attention to, these critical knowledge
functions are very important to the health and survival of the organization.
CKFs consist of five basic characteristics:
1. The type of knowledge (or expertise or skill) involved in performing a function or task.
Examples:
-- Chemical reactor operating expertise
-- Mechanical engineering with specialized understanding of compressor design
-- Securities trading expertise
2. Business use of that knowledge.
Examples:
-- Produce specialty chemicals for the commercial market
-- Develop, build, and sell compressors to industrial customers
-- Increase the value of a retirement fund portfolio for mutual fund customers
3. Constraint that prevents the knowledge from being fully utilized, the vulnerability of
the situation, or the unrealized opportunity that is not taken advantage of.
Examples:
-- There are too few proficient operators and, as a result, many reactors are not run well
(constraint)
-- “Our design knowledge is superb compared with that of the competition. Therefore,
we should offer a broader line of highly specialized custom designs to create a larger
and more profitable market” (opportunity)
• The expert will retire at the end of the year, and we have not trained anyone to replace
her (vulnerability)
4. Opportunities and alternatives for managing (i.e., correcting, improving, or taking
advantage of) the CKF.
Some Knowledge Management Concepts 61

Examples:
-- Create a knowledge-based system to capture expert operator knowledge on reactor
operation and make it available around the clock to all operators
-- Introduce a new product line of compressors that are custom designed for specific
situations
-- Elicit and codify the expert knowledge before the person retires
5. Expected (incremental) value-added of improving the situation -- release knowledge
constraint, take advantage of (exploit) the opportunity to use knowledge differently.
Examples:
-- Increased revenues, increased profit, decreased costs, increased market share
-- Reduce repair costs and time -- to increase net profit and reduce capital investment
(due to higher utilization factor of vehicles in fleet)
The best KM alternatives are often not “natural,” that is, they may not be well known or
be standard responses to particular situations. Typically, the alternatives for improving a
CKF must be created, which requires conceptualizing how business can be done
differently by leveraging the available knowledge and the use of technological options.
Rarely is the best option to “train a replacement for the departing expert” and otherwise let
business go on as usual. Often, it may be desirable to simplify operations or shift
responsibilities and tasks between different functions or even automate some tasks that have
been manual.
In a few instances, it has been found desirable to eliminate the knowledge-intensive
function altogether. The function may initially appear to be critical after the business function
has been redesigned and responsibilities are re-allocated. However, it is later found that the
function has been subsumed by other functions, or in some other instances, it is not needed at
all in the new environment.
Part II
About Knowledge:
How It Is Manifested and Created
Five major subject areas make up the basic functions of the foundations of KM, forming
the overall process that we wish to manage. The process starts with capturing and creating
“what is worth knowing” and ends when we achieve the “business value of using knowledge
effectively.” It is shown schematically in figure II-1.

Figure II-1. The Five Subject Areas of Knowledge Management.

What Knowledge
IS

How How
Knowledge Knowledge Is BUSINESS
What Is Is USED VALUE
WORTH ACQUIRED in of Using
KNOWING (learned) Practice Knowledge
(codified) Effectively
(built)

How Knowledge Is Arranged

and Organized to Make It How Reasoning and Thinking Are
PERFORMED
Useful

The five areas include: (a) How knowledge is acquired (learned, codified, built); (b) What
knowledge is; (c) How knowledge is arranged and organized to make it useful; (d) How
reasoning and thinking are performed; and (e) How knowledge is used in practice.
In this part, we examine basic properties of knowledge and we focus on two of the five
subject areas in some detail. We will explore “what knowledge is” and “how knowledge is
arranged and organized to make it useful.” We will particularly discuss different approaches
to perceive, organize, and characterize knowledge. We need this understanding later when we
discuss learning, problem-solving and decision-making, and use of knowledge for networking
and teaming. Throughout, we will discuss other topics that are part of the foundations for
how we manage knowledge. These topics include: how knowledge flows in organizations
and among people.
 What Knowledge IS

Chapter 3
Knowledge Seen from Different
Perspectives

This Chapter
We do not have available a framework for exploring knowledge and its use in business.
We do not have a theory of knowledge in the same way that we have theories of finance and
management. This chapter, therefore, offers some initial perspectives for such a framework.
At first, the chapter provides a brief discussion of some basic issues. It next furnishes
operational definitions for the difference between knowledge and information and operational
and non-operational knowledge.
The major part of the chapter focuses on five knowledge-related dimensions: (a)
CONCEPTUAL KNOWLEDGE LEVEL dimension to distinguish between idealistic, systematic,
pragmatic, and automatic knowledge; (b) INFORMATION dimension; (c)
TECHNOLOGY dimension; (d) PROFICIENCY dimension; and (e) KNOWLEDGE DETAIL
dimension. This part of the chapter also discusses a number of knowledge-related concepts,
including revisiting what it means to exhibit intelligent behavior.
Next, the chapter focuses on some cognitive aspects of knowledge before we introduce the
human memory system and how it deals with knowledge in different manners. We discuss
working, medium-term, and long-term memories as well as some of their more specialized
sub-memories and some characteristics relevant to practical knowledge use.
The chapter closes with a brief discussion of the human memory flaws and other problems
that sometimes make it difficult for us to distinguish between fact and fiction.

Knowledge Is Multidimensional and Complex!

While working with knowledge in different settings -- with managers, experts, and many
knowledge workers -- we have gained respect for the complexity of available knowledge, for
the way people use it, and for the way it is used in decision-making and knowledge-intensive
64 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

work of any kind. In spite of its complexity, and in spite of the lack of a “theory of
knowledge,” we have discovered that (a) knowledge can be described and categorized in
practical ways and (b) we can assess how individuals and groups acquire and use knowledge
and, to some extent, how knowledge of different characteristics influence the quality of work.
In particular, we have found the perspectives presented in the following chapters to be both
important and helpful for understanding and managing knowledge and expertise. There are
other, often more important and theoretically useful, aspects of knowledge that the researcher
and cognitive scientist need to understand. However, although we will never know too much
about this subject, many of those aspects may not be directly pertinent for KM except in a
peripheral manner.
This chapter seeks to help the manager and knowledge worker form personal insights
about, and perspectives on, knowledge from several different points of view. The manager
who introduces and works with KM must develop a general understanding of what knowledge
is, how different people acquire, process, and use it, and how it can be created, managed,
harnessed, distributed, and controlled. Each individual, manager and knowledge worker
alike, needs to develop understandings and concepts to think about and evaluate knowledge
and human reasoning as used in their own and their coworker’s intellectual work. They must
learn to discriminate between different kinds and manifestations of knowledge, different uses,
and different levels of proficiency and be able to assess the character of knowledge holders --
be they humans, knowledge bases, automated knowledge-based systems, or the organizations
themselves.
Knowledge workers, who often demonstrate high levels of proficiency in particular areas,
must also develop good understandings of how they can organize knowledge in their minds
and in their work environment while learning to use it more effectively and make new
knowledge accessible for use. They must be aware of what is required to codify knowledge to
pass it on to others through training, apprenticing, in procedure manuals, and so on, or having
it computerized in knowledge-based systems. They must also appreciate how knowledge is
embedded in their work products, in the systems and procedures they create, and even in the
organization’s culture and practices. In other words, knowledge workers must acquire an
understanding of “knowledge about knowledge,” or “meta-knowledge.”1
Knowledge is perhaps one of the most nebulous and difficult concepts encountered in our
pragmatic efforts to conduct business. On one hand, knowledge is directly related to all
aspects of human intellectual activity with all its abstractions, complexities, values, feelings,
and creative capabilities. Most of this knowledge is internalized by individuals as tacit
knowledge, which typically is nonconscious. From this perspective, knowledge is relatively

1 The whole area of knowing about knowledge leads to “thinking about thinking” and is part
of epistemology -- a well-established branch of philosophy. Epistemology is often defined as
the branch that investigates the origin, nature, methods, and limits of human knowledge.
After the advent of applied artificial intelligence and cognitive sciences, epistemology has
made great contributions to those areas.
Knowledge Seen from Different Perspectives 65

intangible and elusive. At the same time, we recognize that all business operations are
centered around human activity. Thus, the knowledge that is available within an organization
is its most important asset and may even in part be explicit, that is, describable and tangible.
This broad perspective implies that knowledge -- and with it, expertise, skills, all the other
aspects of these concepts -- is related not only to the cognitive domain, but also to the
business-use domain and to such domains as technology or bibliology when we codify and
structure knowledge in books, knowledge bases, or computer-based training systems or when
we automate knowledge-related reasoning with computers in expert systems.
Since knowledge, and our dealings with it, is so diverse, we need to examine and
characterize it from several perspectives. Further, we need to understand how these
perspectives relate to each other and to the practical work of managing knowledge actively
and effectively. We will look at some of these perspectives below. As we gain more
experience over the next decades, we will redefine and shift our perspectives in new
directions.
As seen from a philosopher’s perspective, knowledge is that which we believe to be true.
From this point of view, it may be considered to be solely an intellectual characteristic.
Without discarding this perspective, in our efforts to manage knowledge, we must also
concern ourselves with the aspects of knowledge that are associated with capabilities to
perform. These capabilities include skills and expertise such as the creation of art and the
ability to be humorous or conciliatory. We also need to be concerned with developing new
knowledge and the potential return from such efforts. In addition, we must be concerned with
aspects ranging from physical dexterity as a learned capability, learned understandings, to
aptitudes that are inherited or acquired from the environment during infancy. We need to
concern ourselves with knowledge flows, transfer of knowledge between individuals and
organizations, learning, and other characteristics that relate to how we manage knowledge.
We are also concerned with manifestations of knowledge as we imbed it in technology,
company practices and environments, or in products and services. All these different
perspectives on knowledge, have relevance in the practical world. Therefore, we need to
manage them actively, decisively, and in the interest of fulfilling our goals and objectives.

Operational Definitions for Knowledge and Related

Concepts
When considering knowledge and knowledge-related actions and processes, many wonder
how they differ and how the concept of knowledge corresponds to other concepts. In daily
conversations, we use many of these concepts without distinguishing clearly what they mean.
Hence, when we introduce a more specific set of perspectives, questions such as the following
are often asked:
“Isn’t knowledge the same as information?”
66 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

“How does knowledge differ from technology?”

“What is the difference between knowledge and wisdom?”
“Knowledge and expertise -- aren’t they the same thing?”
“Aren’t skills and knowledge quite different, with skills referring to how well one can
perform something without knowing much, and knowledge referring to how well one
understands it without necessarily having the skills to perform any practical tasks?”
“Is knowledge alone that important? Don’t you need knowledge, skills, and a positive
attitude to be effective?”
“What is the relation between knowledge and intellectual properties of other kinds? Does
‘knowledge’ cover the ‘ability to apply’ only, or does it also cover knowledge products
such as designs, patents, and even artwork and creative writing?”
“When we learn and develop our personal and collected capabilities, we build knowledge
and skills, but don’t we also develop capabilities beyond knowledge?”
These and similar questions suggest that there are many interpretations of the knowledge-
related concepts and terms that we encounter in standard language use. Also, many issues are
related to how we use our knowledge and how effective we can be, even when our knowledge
is vast. To avoid confusion concerning the use of these terms, we will provide operational
definitions for use in our discussions of knowledge and its management. At the same time,
we will also seek answers to these and many other questions.

THE DIFFERENCE BETWEEN KNOWLEDGE AND INFORMATION

In the preface to this book, we distinguished between knowledge and information. We

defined the difference in these terms:
Knowledge consists of truths and beliefs, perspectives and concepts, judgments and
expectations, methodologies and know-how.
Knowledge is accumulated, organized, and integrated and held over longer periods to be
available to be applied to handle specific situations and problems.
Information consists of facts and data that are organized to describe a particular situation
or condition.
Knowledge is subsequently applied to interpret the available information about a
particular situation and to decide how to manage it. We use knowledge to determine
what the situation or condition means.
As we discuss knowledge in this and following chapters, we should keep this definition in
mind since it is common to think about knowledge and information as if they are
indistinguishable. Specifically, we will deal with knowledge in terms of facts, concepts,
judgments, and procedures that are kept over time and remembered from situation to situation.
These instances cover what we will call operational knowledge to be distinguished from other
nonoperational and more passive forms. We will deal with knowledge that is built and
organized from innovating, experimenting, insights, experience, and from outright reasoning.
In addition, we will deal with knowledge that is built from information that we generalize and
Knowledge Seen from Different Perspectives 67

internalize through different forms of learning. We will deal with tacit, explicit, and
embedded knowledge that is, and may have become, implicit and difficult to identify.
There is not a sharp boundary between information and knowledge. When a person, or
other “active agents,” learns from experience by observing and analyzing new situations,
information about these situations is received and gradually organized and internalized to be
transformed into knowledge. This new knowledge gradually takes shape, at first often being
both uncertain and unconfirmed. New information may be presented about the potential for
new knowledge, but proper knowledge building cannot start until it has been verified that the
information is real.

OPERATIONAL AND NONOPERATIONAL KNOWLEDGE

Operational knowledge, as we will use the term here, deals with all types of knowledge
that may be used to make decisions, perform analyses, provide direction and guidance, or
create new concepts and approaches. The term also includes embedded knowledge, such as
when it is manifested in technology where it may be used as knowledge “building blocks.”
This use of knowledge allows us to achieve results with higher knowledge contents by
incorporating building blocks into our work as modular objects in which considerable
knowledge is already embedded. Without such cumulation of knowledge, it would not be
possible for us to obtain and maintain our present levels of sophistication in any field.
Operational knowledge may be active. That is, it: (a) is organized to be reasoned with;
and (b) is part of or is directly associated with an “active agent” that is capable of engaging
directly in a knowledge-related activity on its own. An active agent, such as a human being
or a computerized knowledge-based system, can be queried and will reason on its own to
generate a conclusion or receive information about a situation and develop a conclusion or a
recommendation for how to handle the situation.
Using this definition of operational knowledge, we can encompass a number of different
kinds of knowledge:
• Knowledge that people hold in their heads as internal knowledge that may be either tacit
or explicit.1
• Codified2 external knowledge that is held in books, knowledge bases, knowledge-based
systems, and in any other forms and artifacts with different degrees of organization,

1 We say that knowledge is tacit when it is held as personal knowledge inaccessible to the
conscious mind but can be used or recalled automatically in special situations. Our “know-
how” is mostly tacit knowledge. Polanyi (1967) introduced the concept of tacit knowledge to
denote that “... we can know more than we can tell.” In contrast, we say that knowledge is
explicit when it can be readily explained (is available to our conscious mind) or when it is
made available to be examinable in documents, procedures, computer programs, etc.
2 Codification of knowledge denotes the process of collecting, assembling, structuring, and

organizing knowledge into a knowledge model that is as descriptive, rational, coherent, and
complete as possible. Codified knowledge is also explicit.
68 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

accessibility, and automation.

• Embedded knowledge in systems, procedures, organizational and management structures,
traditions, culture, operational practices, designs and definitions of products and services,
and in technology, patents, and other kinds. (Many kinds of embedded knowledge can
also be considered intellectual property such as patents, designs, compositions, and
copyrighted books.)
These kinds of knowledge contribute operationally to the way we operate in our work or
in our daily life. Even obscurely embedded knowledge in a company’s culture influences our
behavior. One example of embedded operational knowledge is found in the complex
computer-aided design (CAD) systems that are now in common use.
Nonoperational knowledge, on the other hand, is considered to be passive. Passive
knowledge includes several forms, some of them falling under what we may consider
intellectual property. For example, most artwork and creative writing belong this category.
Passive knowledge may, or may not, be organized to be used directly in reasoning. It is
disconnected from any active agent, but may be created to elicit reactions. In general, we can
consider a knowledge product to be nonoperational if it is created for purposes other than
serving as a building block, to guide or govern some decision or knowledge-intensive work
process, or to capture and document general or professional knowledge in a particular area
such as the classification system of sea worms. Some organized knowledge can be passive
such as when it exists in library books and procedures manuals. Passive knowledge can also
be held by people as when they remember isolated facts or specific episodes.

Five Knowledge-Related Dimensions

The concept of knowledge must be characterized along several dimensions. In order to
manage knowledge decisively and with the desired impacts we must provide operational
definitions for several of these dimensions to understand what takes place, identify, and to
describe how people deal with knowledge-related opportunities and challenges and use
knowledge in their work. This is important when we assess which knowledge is available or
needed in particular situations and when we work with knowledge outside people, that is,
knowledge that is embedded in systems and procedures, books, teaching materials, or
computers. Finally, operational definitions are particularly important within organizations.
Figure 3-1 provides a conceptual overview of the five central knowledge-related
dimensions: Conceptual Knowledge Level, Information, Manifestation, Proficiency, and
Knowledge Detail. Jointly, these dimensions define major concepts that we typically work
with in the realms of knowledge in people, codified knowledge, and knowledge that is
manifested in artifacts, technology, and culture. The Proficiency dimension defines the ability
of the performer while the Knowledge Detail dimension provides elaborates on the concepts
of Skills, Expertise, Knowledge, and Wisdom. In addition to these dimensions, we will also
find needs to distinguish between types an forms of knowledge.
Knowledge Seen from Different Perspectives 69

Figure 3-1 illustrates those elements of each of the five dimensions that are directly
involved when we act intelligently. The Conceptual Knowledge Level dimension, in
particular, provides us with insights into how we hold and use knowledge as we become
increasingly familiar with a subject. A few elements of the Manifestation and Information
dimensions contribute directly to our “capability to act intelligently” and our full range of
proficiency also contributes. Knowledge is the central element, and all aspects of the
Knowledge Detail dimensions are collapsed into the Knowledge Element, which in turn is
shared by both the Manifestation and the Information dimensions.

Figure 3-1. Five Knowledge-Related Dimensions.

Information Proficiency
on
en si Dimension Dimension
e l Dim
Lev
Pathways Beginner
Goal Setting
ge
led
Idealistic
n o w Knowledge
al K
Advanced
Systematic
p t u Signals Beginner
nce
Knowledge
C o Pragmatic
Competent
Knowledge
Performer
Data
Automatic
Knowledge
Proficient
Performer
Information

Manifestation Dimension Expert

Devices & Technology Skills Expertise Knowledge
Machines
Systems & Master
Procedures
Organization
Capability
to Wisdom

Act Intelligently Grandmaster

Knowledge Detail Dimension

Knowledge
Knowledge Knowledge Knowledge Segment Knowledge Knowledge Knowledge
Domain Region Section Ref. Case Element Fragment Atom

Definitions of the different levels (or “states”) of the five dimensions are given in Tables
3-1, 3-2, 3-3, 3-4, and 3-5. Examples and explanations are also provided to illustrate the
meanings of each state.1

1The Proficiency dimension is discussed further in Chapter 5, Approaches to Characterizing

Knowledge. It is one of the more useful characterizations of the level of what an individual
knows or what is needed to be known to perform a certain task. The Conceptual Knowledge
Level dimension is also discussed further in Chapter 5.
70 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Table 3-1. Operational Definitions of Knowledge and Related Concepts.

CONCEPTUAL KNOWLEDGE LEVEL Dimension
Conceptual Characteristics
Knowledge Levels
GOAL-SETTING or Part of this knowledge is well known to us and explicit --
IDEALISTIC KNOWLEDGE we work consciously with it
Vision and Paradigm Much of it -- our visions and mental models -- is not well
Knowledge known, it is tacit, and only accessible nonconsciously
SYSTEMATIC KNOWLEDGE Our knowledge of underlying systems, general principles,
System, Schema, & Reference and problem-solving strategies is, to a large extent,
Methodology explicit and mostly well known to us
Knowledge
PRAGMATIC KNOWLEDGE Decision-Making knowledge is practical and mostly
Decision-Making & Factual explicit. It supports everyday work and decisions, is well
Knowledge known, and is used consciously
AUTOMATIC KNOWLEDGE We know this knowledge so well that we have automated
Routine Working Knowledge it. Most has become tacit -- we use it to perform tasks
automatically -- without conscious reasoning

Table 3-2. Operational Definitions of Knowledge and Related Concepts.

The INFORMATION Dimension
Information Examples
States
Pathways Air; coaxial cables; glass fiber; (ether) -- Media that transmit signals
Signals Sound waves; electric pulses signifying “0s” and “1s;” light reflected from
objects to observers; strokes of pen on paper
Data Sequences of numbers and letters; spoken words; pictures; even physical
objects when presented without a context
Information Organized data: tables of annual sales statistics; a magazine article; a well-
presented talk; a picture or an object when presented in a particular context
Knowledge Organized information: understanding what the sales statistics mean and
how to interpret them
Ability to provide judgment on sales statistics; hypothesize and learn what
Wisdom is happening within the company and which forces may be at work in the
market place; propose valid and valuable ways to deal with new situations

KNOWLEDGE MODELS

When we build knowledge outside people, we codify the knowledge into more or less
well-structured knowledge models and knowledge bases. The corresponding knowledge
models take on many forms and are abstract and simplified representations of the basic,
Knowledge Seen from Different Perspectives 71

underlying knowledge. As such, they cannot contain all aspects and features of the basic
knowledge that a person holds in his or her head.
Philosophers and psychologists have long attempted to explain how we think, act, and
organize our knowledge. To aid their work and explain what they observe, they have created
many models. Recently, cognitive scientists and artificial intelligence researchers have made
more formal models to explain human mental functions. Finally, with the advent of
noninvasive in vivo methods, our understandings of these phenomena advances daily.

Table 3-3. Operational Definitions of Knowledge and Related Concepts.

MANIFESTATION Dimension
Technology Explanations and Examples
States
Highly specific embedded application of knowledge
Devices “A piece of equipment or mechanism designed to serve a special purpose or
& perform a special function; an assemblage of parts that transmit energy,
Machines force, or motion and is operated to perform a task.”1
• Miniaturized cellular telephone handsets
• General machine tools
• Point-of-sale laser scanners and associated backroom computers
Application of implicit knowledge to a specific area
Technology “Applied science; scientific method to achieve a practical purpose.”
• Ability to design and produce miniaturized electromechanical devices
• Ability to operate machines to produce miniaturized devices
• Equipment suitable for manufacturing miniature devices
• Ability to design store information systems using POS devices and install,
maintain, and operate this kind of equipment
Explicit “how-to” knowledge for specific purposes
Skills “A learned power of doing something competently.”
• Ability to operate machines to produce quality miniaturized devices
• Capability to run a particular store better with POS equipment
Broad, explicit application knowledge and judgments to solve real problems
Expertise “The skill of an expert.”
• Capability to design and produce highest-quality miniaturized devices
• Ability to exploit POS capabilities to excel competitively
General understanding and insights that may not be focused on application
Knowledge “Understanding of an art, a science, or a technique.”
• Theoretical understanding behind engineering design and manufacturing
principles for miniaturized electromechanical devices
• Understanding how POS equipment is integrated into operations

In this book, we do not focus strongly on these models, although we discuss some aspects

1 Entries in italics are adapted from Webster’s Ninth New Collegiate Dictionary, 1986.
72 Knowledge Management Foundations:
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of them. Instead, we focus on knowledge models of “business and expert knowledge” (what
we also may call “professional knowledge”) that may be used in practical management of
knowledge and that should correspond to the latest findings of cognitive science. We also
consider how detailed knowledge may be assembled in codified knowledge bases organized
according to specific models and intended uses.

Table 3-4. Operational Definitions of Knowledge and Related Concepts.

PROFICIENCY Dimension
(See Chapter 5 for greater detail and examples.)
Proficiency Levels Explanation
Ignorant Totally unaware, with no understanding or judgment
Beginner Vaguely aware of field -- innocent with no real experience
(Amateurish)
Advanced Beginner Aware and partially informed but relatively unskilled
Competent Performer Beginning deeper understanding -- narrowly skilled
Proficient Performer Competent and broadly skilled -- knowledgeable in selected areas
Expert Highly proficient in a particular area -- generally knowledgeable
Master Highly expert in many areas and broadly knowledgeable
Grand Master World class expert in all areas of the knowledge domain

A person’s knowledge contains a large number of associations and links to other areas of
understanding of which we elicit but a small fraction. Similarly, we do not know how the
knowledge is really organized in the person’s mind. As a result, despite every effort to obtain
a correct representation of the underlying knowledge, knowledge models are always
simplifications. They are constructed for particular purposes and the knowledge is collected
and codified from corresponding perspectives to serve those purposes.
There are many kinds of practical knowledge models. Some are detailed and represent
knowledge with rules, scripts, and cases (a discussion of knowledge representation can be
found in Part IV, A Knowledge Management Framework). Others are more aggregated,
providing overviews of the knowledge instead of representing the knowledge itself with great
detail and precision. Some knowledge models are represented by use of natural language,
others by logic statements, yet others by mathematical equations or even multimedia
presentation with sound and animation. For some purposes, we can use static knowledge
models while at other times we must use models that reflect changes over time or changes
driven by new conditions and considerations.
Associated with the different knowledge models, we need to consider models for how the
human brain functions and is organized. These issues fall outside the scope of this book, but
some discussions are provided below. The interested reader is referred to the large body of
literature on neural physiology, physiological psychology, and cognitive sciences, which have
given rise to some interesting models for how the brain operates based on the anatomy and
Knowledge Seen from Different Perspectives 73

physiology of our nervous system.

Table 3-5. Operational Definitions of Knowledge and Related Concepts.

KNOWLEDGE DETAIL Dimension
Knowledge Examples
Span
Domains of:
Knowledge • Internal Medicine
Domain • Mechanical Engineering
• Business Management; etc.
Regions of:
Knowledge • Urology
Region • Automotive Mechanical Design and Engineering
• Product Marketing; etc.
Sections of:
Knowledge • Kidney Diseases
Section • Transmission Design
• New Product Planning; etc.
Segments or “Cases” of: 1
Knowledge • Diagnosis of Kidney Diseases
Segment • Gear Train Specification and Design
or • Product Marketability Evaluations; etc.
Reference Specific Reference Case of:
Case • Diagnosing Mrs. Smith’s kidney stone with its complications; etc.
Elements of:
Knowledge • Diagnostic strategies, such as “When considering which disease is present,
Element first collect all symptoms, then try to explain as many of them as possible
with one disease candidate”
• Gear Train Contact Force and Energy Loss Calculations
• Customer Acceptance Estimations; etc.
Fragments of:
Knowledge “If the symptom is excruciating pain, then consider kidney stone”
Fragment “When a transmission has too many gears, the energy loss will be excessive“
“When there are many comparable and competitive products already in the
marketplace, a new product must offer very special and attractive features
to be highly competitive”; etc.
Atoms of:
Knowledge “One symptom is excruciating pain”;
Atom “Use case hardening of gear surfaces in pressure range 4”;
“Price is a negative competitive factor in most cases”; etc.
One theoretical model for how the brain works from an abstract perspective has been

1 A Case is a knowledge entity that describes an Episode which is abstracted by its

characteristics and when applicable, with indications of how the episode was handled,
interpreted, and what the outcomes were. We often refer to these cases as “Reference Cases.”
74 Knowledge Management Foundations:
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proposed by Professor Minsky1 at the Massachusetts Institute of Technology. Professor

Minsky’s concept, “the society of minds,” provides a model of a large network of relatively
independent, but associated, “minds” that operate in parallel to interpret what goes on in the
world and reason relatively independently to arrive at conclusions. As we see in the next
chapter, this model is closely related to other models for how the brain works.
Simpler, but related models, are the neural nets. These are emerging as practical models
that we can use to automate complex reasoning processes, particularly when they are
associated with pattern recognition.2
When we characterize and model knowledge, we must also consider the epistemological
perspective. Most of the material presented in this book is based on the Western
epistemological tradition to which the Greeks were great contributors. Eastern perspectives
also have considerable merit in this regard and may be more relevant when we discuss
qualitative and “fuzzy” reasoning later, as well as when we consider many of the aspects of
human reactions and nonconscious behavior that fall outside the realm of “logic reasoning.”

IMPORTANT KNOWLEDGE-RELATED CONCEPTS

Beyond the outline descriptions for the five dimensions presented in Tables 3-1 to 3-5, it
is appropriate to amplify some of the central knowledge-related concepts that are particularly
useful. These are indicated below.
Data appear in many different forms. Data may be numbers, letters, or words where the
context or organization is not established. Data may also be analog signals, numbers,
pictures, or even physical artifacts such as a textbook used by a knowledge worker which has
been collected for later analysis of how the knowledge worker performs work tasks.
Generally, “Data are undigested observations, unvarnished facts.”3
Information also appears in many forms. For data to become information, they must be
presented in context, with some purpose and with a discernible organization so that it will
have relevance to a situation, problem, issue, or some other condition. Generally,
“Information is organized data -- organized by others, not by me.”4 Information can be
thought of as full or partial description of the state or condition of a situation.
Technology can be considered as the manifestation or realization of knowledge and skills
in established methods and physical objects that are created to provide solutions to practical
problems. According to Webster,5 technology is:

1 See Minsky, (1985), The Society of Mind.

2 For discussion of neural nets see, for example Hinton, (1992) for a very readable article.
3 These and following quotes are from The Knowledge Executive by Harlan Cleveland

(1985) (pp. 23-24), who provides a very insightful discussion of what data, information,
knowledge, and wisdom are.
4 Cleveland (1985), Op. Cit.
5 Webster’s Encyclopedic Unabridged Dictionary of the English Language, (1989), p.

1458.
Knowledge Seen from Different Perspectives 75

1. The branch of knowledge that deals with industrial arts, science, engineering, etc. --
also the art of mastering a technical area.
2. The terminology of an art, science, etc.; technical nomenclature.
3. A technological process, invention, method, or the like.
4. The sum of the ways in which a social group provides themselves with material
objects of their civilization.
We may look at technology as highly organized and explicit knowledge that has been
made concrete and visible. Technology can be considered to be “knowledge how” or know-
how without much necessity of understanding. This is opposed to “knowledge why,” which
provides insights and is based on understanding.
Proficiency means being well advanced in an occupation or a branch of knowledge.1
Proficient implies a thorough competence derived from training and practice; adept implies
special aptitude as well as proficiency; skilled stresses mastery of technique; expert implies
extraordinary proficiency, often connoting knowledge as well as technical skill.
Knowledge can be thought of as the body of understandings, generalizations, and
abstractions that we carry with us on a permanent or semi-permanent basis and apply to
interpret and manage the world around us. We consider knowledge to consist of four separate
types:
1. Factual knowledge -- Isolated facts and remembered sensory inputs and episodes.
2. Conceptual knowledge -- Complex concepts, gestalts, mental models.
3. Expectational knowledge -- Expectations, judgments, and known, yet unproved
hypotheses.
4. Methodological knowledge -- Methods and strategies for doing things.
On one hand, we will consider knowledge to be the collection of mental units of all kinds
that provides us with understanding and insights. On the other hand, we will also consider
manifestations of knowledge when it has been synthesized and is external to humans. As
discussed in this chapter, however, knowledge consists of many types of mental items and has
many levels of abstractions, from the very concrete, clear, and factual to the very obscure and
ambiguous. Knowledge also includes personal perspectives on how things, concepts, and
other knowledge items relate to one another, either directly or by association. We use our
knowledge to determine what “it means.” According to Webster,2 knowledge is:
1. Acquaintance with facts, truths, or principles, as from study or investigation; general
erudition: ...
2. Familiarity or conversance, as with a particular subject, branch of learning, etc.: ...
3. Acquaintance or familiarity gained by sight, experience, or report: ...
4. Fact or state of knowing; perception of fact or truth; ....

1 These definitions are based on Webster’s Ninth New Collegiate Dictionary, (1986), p.
939.
2 Webster’s Encyclopedic Unabridged Dictionary of the English Language, (1989), p.

793.
76 Knowledge Management Foundations:
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Generally, “Knowledge is organized information, internalized by me, integrated with

everything else I know from experience or study or intuition, and therefore is useful in
guiding my life and work.”1 Knowledge consists of the general understanding of a domain in
a manner that is integrated and in harmony (it is congruent) with what else is known.
Education typically provides knowledge and understanding, thereby promoting generalization
as opposed to training which provides specific routine skills.
One way to organize knowledge is to use hierarchies. We often “chunk” knowledge to
allow several detailed concepts to form higher-level (more aggregated or abstract) concepts.
Knowledge may also -- or at the same time -- be organized into associative networks
according to relations among individual knowledge units. Knowledge in peoples’ minds, and
in other forms that may be external to humans, can be represented by words, images,
“scripts,” mental concepts, or in many other ways. And as we discuss below, many aspects of
knowledge are held outside the human mind in a variety of forms.
Skill is the practical ability to perform certain tasks and functions particularly based on
knowledge of techniques. In reality, one does not need to have deep understanding of a
domain to be skilled in performing tasks within that domain. Unfortunately, in the business
world, being highly skilled often means that one is very good at performing tasks in the
present environment, without necessarily possessing the knowledge and broad understanding
required to be flexible enough to transfer those skills to a new environment when business
changes. Being highly skilled may even be a liability when the world around us changes!
According to Webster,2 skill is:
1. The ability, coming from one’s knowledge, practice, aptitude, etc., to do something well;
2. Competent excellence in performance; expertness; dexterity ...
Skill (or know-how) is the ability to perform a task without necessarily understanding the
principles behind it or why the task is performed in the prescribed manner. Training typically
provides skills, often in the form of specific, inflexible “how-to” knowledge with little deeper
understanding and, therefore a lack of flexibility.
Expertise is a person’s specialized knowledge and skills in a particular area that has
been developed and accumulated over a long time. Expertise is generally accompanied by a
deep understanding of the special area and is complemented by broader knowledge of
adjacent domains that affect the special area. According to Webster,3 expertise is:
“Expert skill or knowledge; expertness; know-how ...”
Expertise includes at least factual and methodological knowledge, and in almost all cases
also conceptual and Expectational knowledge.
Intelligence (in general) is the ability of a person (or other “active agents”) to think,

1 Cleveland (1985), Op. Cit.

2 Webster’s Encyclopedic Unabridged Dictionary of the English Language, (1989), p.
1335.
3 Webster’s Encyclopedic Unabridged Dictionary of the English Language, (1989), p.

502.
Knowledge Seen from Different Perspectives 77

reason, learn, understand, and act. Intelligence also applies to organizations and includes the
capabilities to innovate and acquire knowledge and apply it to relevant situations. Humans
have native intelligence which they can build and improve upon. Organizations exhibit
intelligent behaviors. Machines can be said to have intelligence, but only on a very limited
scale. Their intelligence is provided by humans; its quality depends upon how complete it is
and how it is represented and used by the machine in practical situations.1
For the purposes of managing knowledge, we will consider intelligent behavior by
humans, organizations, or even machines to include the characteristics as discussed in some
detail in the previous chapter and summarized in Table 2-1. Intelligence is also used to
denote information about adversaries and competitors. That meaning is not pursued in this
book.
To realize the value of knowledge by using it effectively, the knowledge holder’s attitude
is of great importance. The attitude of a person who learns is also a major factor in
determining the effectiveness of the learning situation. We will discuss some of these aspects
of attitude in the next chapter.
Wisdom embodies intelligence but also the understanding of what is right, wrong, true,
false, and of lasting value. Wisdom also includes the ability to accept that new directions may
be desirable and perceive where they may lead and what they may imply. A wise person is
learned and experienced -- and also has the capability and willingness to learn about new
situations and concepts -- a wise person is flexible on factual, abstract, and judgmental levels.
The wise person is also versatile and has the ability to consider situations from different
perspectives and apply relevant expertise where that is required. These basic abilities lead to
a number of desirable characteristics. One is that the wise person views situations from
broader perspectives and takes into account more factors than less experienced persons.
It has been proposed that “wisdom” is the capability to continue to learn in its broadest
forms and on all levels of concreteness and abstractions, to remain flexible, and to be able to
view situations from many perspectives.2 These notions on wisdom follow conventional
patterns that seem to be well-established in colloquial use. More specifically, these notions
on wisdom may be summarized in the following manners:
• Wisdom provides the ability to envision broad implications.
• Wisdom is the capability to have well-founded, valid, and valuable opinions, judgment,
and knowledge.

1 Binet and Simon (1961), developers of the modern intelligence test, suggested that
intelligence represents “judgment, otherwise called good sense, practical sense, initiative, the
faculty of adapting one’s self to circumstances ...”
The Wechsler Adult Intelligence Scale of “intellectual abilities” uses these characteristics:
Information; Picture Completion; Digit Span; Picture Arrangement; Vocabulary; Block
Design; Arithmetic; Object Assembly; Comprehension; Digit Symbol; and Similarities.
Appropriate as they may be for measuring a human’s basic intelligence, characteristics such
as these are not particularly helpful for managing knowledge in people or organizations.
2 Professor Ishwer Ojha (1990), personal communication.
78 Knowledge Management Foundations:
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• Wisdom is willingness to be flexible -- to accept that a situation may in reality be quite

different from what it appears at first sight or have totally different goals and objectives
than past judgment would lead one to believe.
• Wisdom is willingness to learn -- to critically consider new and contradicting knowledge
without psychological reservations which may be associated with effort and pain of
rethinking, resystematizing, developing new judgments and discarding old ones, and
making new and past knowledge congruent by discarding what has become erroneous.
• Wisdom is the background provided by a wealth of experiences and knowledge of many
areas that allows a person to “see” a situation from many perspectives and generate
scenarios to explain and illustrate the relevance of such perspectives and visions.
• Wisdom is the wide experience a person has and that taught the person that s/he at times
may be misinformed, have invalid or wrong knowledge, or perform inaccurate or invalid
reasoning.
More generally, “Wisdom is integrated knowledge, information made super-useful by
theory which relates bits and fields of knowledge to each other, which in turn enables me to
use knowledge to do something.”1

Cognitive Aspects of Knowledge

Cognitive science -- the science of how humans (and according to some, also artificial
devices) think, know, reason, feel, and emote -- has come to combine several areas including
primarily psychology, philosophy, linguistics, artificial intelligence, and computer science.
To help us develop a better working understanding of what happens when we observe and
analyze how our coworkers acquire, hold, and use knowledge and what their individual
strengths and weaknesses are, we borrow selected aspects and perspectives from those
domains. These perspectives will help us understand what they can, and cannot, tell us, and
under what conditions they can recall, relate, and use what they know. We need this
knowledge when we consider how people learn, when we plan transfer of skills, technology,
and knowledge in general, as well as which responsibilities we ask individuals to accept.
Finally, it helps us understand how to deal with knowledge in the context of organizations.
Most of what happens inside our brain is subject to speculation. Painstaking research over
the last century has given us insights into how our brain works and how we process
information and knowledge. Still, our models for how we experience, think, and remember
are under constant scrutiny and revision. Important new aspects of what happens inside our
heads are constantly discovered, and it is fair to believe that it will be centuries before we
really understand our cognitive functions.
As we increase our understanding of how our brains work, we are able to improve the
methods by which we explicate what we know and how we know it in many areas. We need

1 Cleveland, Op. Cit.

Knowledge Seen from Different Perspectives 79

new understanding of these issues for several purposes: (a) to improve our methods for
surveying, describing, eliciting, codifying, and communicating human knowledge; (b) to
improve how we represent and organize knowledge outside humans to make it easier to
assimilate and reason with by other people and by machines; (c) to improve how we build,
accumulate, and organize knowledge; and, above all, (d) to improve our understanding of how
we use the knowledge that is available, either directly or by pooling it with knowledge from
several sources -- from people, machines, or embedded in books, systems and procedures, or
the organization’s culture.
To a large extent, the models we have developed to show how our brains work are also the
models we use to represent and use knowledge in business and technology. After all, we, the
humans, are both sources and end-users of knowledge and the beneficiaries of results from its
application. We are also often the models for how we try to automate knowledge and
reasoning. In addition, to promote understanding and ease-of-use, it has often been
considered helpful to pattern our automated reasoning aids according to the way we think and
organize our knowledge.

The Human Memory System

When we communicate with the world outside ourselves, we use a highly complicated
system. Our senses provide inputs from our eyes, ears, nose, mouth, and from sensors in our
skin and other parts of our body. All this information is continually fed to our working (or
short-term) memory and similar faculties where we consciously or nonconsciously sort and
classify it and transfer much of it to the longer-term memories to be processed further or
remembered outright. On the way to becoming transferred to long-term memory, the mental
objects we create from received information may be retained temporarily in “buffer memory”1
where they reside for some time after working memory has forgotten (or released) them.
Retrieving memory objects from buffer memory is easier and quicker than obtaining them
from long-term memory. After some hours, the mental objects in this intermediate memory
are typically no longer available but must be retrieved from long-term memory if we want
access to them again.
When we remember mental objects, it appears to be a result of long-term potentiation
(LTP) where certain neurons’ synapses are strengthened because of mental activity.
Previously it was believed that single, isolated synapses were strengthened and that this led to
a “bit-like” memory as in digital computers. Recent work by Bonhoeffer and his colleagues2
and others indicate that memory is produced by spreading potentiations of many neighboring

1 We have introduced the concept of “buffer memory” to explain what happens when we store
and retrieve mental objects in the intermediate term. It has no known physiological basis but
explains the intermediate state of memorization.
2 Bonhoeffer et alia (1989).
80 Knowledge Management Foundations:
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synapses from numerous neurons. This leads to a much more complex -- and more robust --
memory system.

Figure 3-2. Conceptual Model of the Human Memory System.

Nonconscious
Working Memories
Visuo-Spatial
Conscious Long-Term
Working
Central Memory
Memory
Executive
Visuo-Spatial Procedural
Sensory Memory
System Articulatory
Central
Executive
Articulatory
Episodic
Memory
Conceptual
Memory
Semantic
Memory
Lexical
Encyclopedic

Buffer
Memory Priming
Memory

Motor
System

One of the difficult operational aspects of our memory system is that we do not have
direct, conscious access to mental objects stored in long-term memory. Long-term memory
apparently must be accessed through our working memory, which then becomes a limiting
factor. This is important when we wish to explore what people know since, as we discuss
below, people do not normally know what they know. We often do not have access to much
of our particular knowledge until we need to use it in a specific situation and are reminded --
until we are “primed to use it.” 1

1 Priming has been established to be an important mechanism for recalling what we know.
Knowledge Seen from Different Perspectives 81

A conceptual model of the human memory system is shown in Figure 3-2. In this highly
idealized model, the communication paths between different memory areas are shown with
arrows. Communications with the sensory and motor systems are also indicated. We depict
the different memories as separate areas of the brain. This is not generally the case in reality,
but helps explain the functions.

Specialized Areas of Our Brain

Our brain is organized to contain a large number of specialized areas such as vision,
hearing, smell, language, number manipulations, and so on.1 In addition, our right and left
hemispheres serve distinctly different functions. Whereas the left hemisphere is dominant for
processing language and conceptual and classificatory functions, the right hemisphere is
dominant for processing spatial functions and detailed analysis and discrimination. Musical
ability also is located in the right hemisphere.
Hemispheric dominance is not always clear-cut, however. For example, although the
numerical abilities including understanding numerical relations and concepts are located in
the right hemisphere, the ability to read and produce signs of mathematics reside in the left
hemisphere.2

WORKING MEMORY

Working memory, or short-term memory, is considered to be the center of our conscious

self. Conscious and explicit reasoning takes place in working memory at the top level of our
attention. Hence, when I think about how I will drive across town to a particular address, I
reason about it in my working memory. To help me, I retrieve from long-term memory
images, knowledge of the road conditions, different routes that I am familiar with, and similar
material and use that to “think” consciously about what to do.
One noteworthy aspect of our present model is that we have the equivalent of many
working memories which can operate on different levels of consciousness or attention. Of
major interest is the working memory that operates on the conscious level. However, we have
the ability to perform reasoning and other mental functions nonconsciously as when we
“suddenly get a good idea” without having thought explicitly about it or when we suddenly
remember the name of a person that we met five minutes earlier but could not name at the
time. Similarly, we perform a large number of activities in automatic or semi-automatic
ways. For example, we can carry on a deep and highly conscious conversation with someone
while driving a car, we can discuss difficult topics with someone while we walk, or open and

1 A thorough discussion of the brain’s organization can be found in Michael Posner (1989)
Foundations of Cognitive Science, Chapter 8: “Brain and Cognition.”
2 Discussion of hemispheric functioning can be found throughout Howard Gardner’s (1983)

Frames of Mind: The Theory of Multiple Intelligences.

82 Knowledge Management Foundations:
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close doors automatically and analyze obstacles and make semi-automatic decisions on where
to step.
In reality, we do not have a physically separate set of neurons that constitutes our working
or short-term memory. Instead, we activate selective parts of our brain when we focus on
topics or functions handled by that area. When our brain is activated in this way, the target
area becomes the focus of our consciousness and will remain active for about five seconds
after our conscious mind has shifted its focus elsewhere. That is our conscious short-term
memory.
To illustrate the way our conscious and working memory works think of the following
model: We are in a dark room with a flashlight. Wherever we shine our flashlight on the wall
is where activity takes place, where our consciousness is focused and where we can perform
short-term memory tasks. After we move the light beam elsewhere, the wall continues to
glow with an afterglow that lasts for some five seconds.
Another model -- the “pinball machine model” -- has been proposed to illustrate how we
shift our attention from one subject to the next. The pins are different subjects or concepts.
The ball is our conscious focus. The focus bounces from one concept to another driven by
associations and reasoning results from the mental activities at the last stop.
We do not know what changes occur in the brain to transfer mental objects from working
memory to long-term memory. It appears that the retention of mental objects in working
memory is caused by temporary chemical changes in neurotransmitters and receptors. The
initial chemical changes are later replaced by new, semi-permanent or permanent neural
connections which then result in long-term memory. What happens in between, that is, when
the medium-term buffer memory is in effect, is not known.
Our working memory has been demonstrated to be a “serial processor,” capable of
handling only one issue or stream of conscience at the time. Working memory is quite rapid,
with access time and “object manipulation cycle” in the hundred millisecond range. We now
consider this to be slow compared to modern personal computers and allows us to make only
a small handful of reasoning steps every second. However, although working memory
capacity is thought to be only of the order of seven to nine “chunks”1 or mental objects at a
time, a chunk may be quite complex ranging from a symbol, 2 - 4 digits in a group, an
abstract concept, an image, or a phrase. Hence, since a vast amount of understanding and
meaning may be encapsulated in a chunk, we can process tremendously complex reasonings
in the blink of an eye. In situations where the mental objects that we reason with are complex
abstract concepts, we adopt reasoning that is qualitative (“fuzzy,” “approximate,” or
“inexact”) rather than using crisp and precise logic and arithmetic as when we add 2+2 and
find that the result is 4.
When we speak deliberately about what we think or remember, we use working memory
to select what we want to say. The material that we wish to communicate: facts, concepts,

1George A. Miller (1956) reported the capacity of working memory in his famous study “The
magical number seven plus minus two.”
Knowledge Seen from Different Perspectives 83

relations between them, etc., is recalled from long-term memories into working memory. We
consciously weigh and select what we want to say; we may even “think in words” as most,
but far from all, people do. Next, we encode what we have selected to say into words and
sentences and utter those as speech. Since working memory is a serial processor, and since
speaking is a “linear process” that only allows presentation of one word and line of thought at
a time, this is a relatively slow process. It is often further slowed by the fact that our thinking
appears to be a parallel process where many lines of thought are pursued nonconsciously at
any one time (as when we activate several of our nonconscious working memories to perform
different tasks).
When we consciously pursue one line of thought and recall related memory objects for
processing the “next items,” we may recall many objects, some of which have direct, while
others have indirect associations with the “thought” we want. As a result, our working
memory may be presented with many simultaneous memory objects and becomes burdened
by the need to process this wealth of facts, perspectives, and concepts that often are at
different levels of abstractions and, therefore, require considerable processing to be
compatible. The working memory, in effect, becomes a significant bottleneck in our attempts
to communicate what we know when we are fortunate enough to recall the relevant memory
objects. The first time we have to communicate something that we know well, we may find it
difficult to select which concepts to present -- what we want to say. If we talk repeatedly
about the same issue, it becomes easier for us to explain. We may even have remembered a
sequence of statements (a “party line”) that expresses what we wish to communicate. In the
end, that tendency may lead to inflexible, rigid explanations and positions that can be a
liability when the world around us changes.
When we know a subject extremely well we normally have automated or compiled our
knowledge. Therefore, it is no longer necessary to access what we know in detail. In fact, the
details may no longer be available to working memory, making it impossible for us to explain
what we know. How this happens has not been established.
Conscious working memory is considered to be divided into three specialized functions:
(a) The central-executive function controls what we think about. (b) The visuo-spatial
scratch pad holds the memory units (chunks and associations) while we work with them.
And (c) The articulatory loop (or “phonological” loop)1 is the mechanism we use to speak,
write, and express other physical behavior -- including nonverbal gestures and facial
expressions -- to the external world. The articulatory loop is coupled very closely to the
motor system. We may have the capacity to operate what appear to be several parallel
working memories, which we use at different levels of consciousness to perform more or less
automatic mental functions and tasks, some of which can be very complex.

1 Baddeley (1992) discusses these and other general aspects of working memory.
84 Knowledge Management Foundations:
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MEDIUM-TERM “BUFFER MEMORY”1

As indicated, our ”buffer memory” plays the role of a medium-term memory where we
store a large number of mental objects that we work with right now, or have worked with
during the last several hours. Mental objects stored in the buffer memory are easily accessed
by working memory. At the same time, they are also easily forgotten. We all can relate to the
store manager’s statement about two customers who just left that “I know they were in here
before and that they looked at the jacket they just bought. But I cannot remember if it was
last night or this morning.”
Further, people retain mental objects stored in their buffer memory differently. Some may
remember facts accurately but cannot remember what was said or how statements were
phrased, others remember verbal statements precisely but cannot remember facts per se, still
others remember neither facts nor verbal statements but know what the underlying concepts
were on a much broader basis than the other two groups. This variability is worth
remembering when we work with what our co-workers know and how they obtain and use
new knowledge.

LONG-TERM MEMORY
Long-term memory stores information and knowledge as mental objects for long periods.
It appears to be created by permanent links that somehow represent what we know. Long-
term memory is thought to have “limitless” capacity for things to be remembered. It is
located throughout the brain in the areas where the various functions for vision, speech, and
so on, are located. The memory objects that we store in long-term memory are not directly
accessible to our conscious, but must be accessed by activating working memory. As
indicated above, this is often a significant bottleneck.
Our long-term memory is organized into at least four separate kinds of memory, which
serve quite different purposes: procedural, episodic, priming, and semantic tasks. Semantic
memory is further divided into lexical and encyclopedic memories. Some researchers also
suggest that the episodic and semantic memories together form conceptual memory. Other
researchers suggest that the distinction between semantic and episodic memory is wrong, that
there is semantic content in episodic memory, that conceptual memory is episodic in nature,
and that lexical memory contains knowledge of syntax.
The domain of procedural memory is thought to be behavior, whereas the domain of
episodic, semantic, and priming memories is cognition.2 All these memory functions have
properties that are both interesting and important when we work with what our coworkers
know, how they reason, how they differ, and how they gain access to their knowledge, as well
as when we consider how we can manage knowledge in daily situations.

1 The notion of “buffer” or “medium-term” memory is not uniformly accepted but is almost a
requirement when attempting to explain the actual performance of human professional work.
2 By “cognition” we mean the process of knowing, including both awareness and judgment.
Knowledge Seen from Different Perspectives 85

Procedural Memory

Procedural memory is where we remember how we do things -- the procedures we follow

when we perform tasks we are familiar with and skilled in. Our procedural memories keep
such mental objects as schemas, scripts, and routines as well as specific ways of and acting. It
is believed that our procedural memory holds knowledge of methods and scripts in the form
of sequential steps or as chains of events where the outcome of one event feeds into and
controls the behavior of the next. The sequential steps can be distinctly discrete steps or can
be similar to “waves” of activities whereby one activity wave gradually changes into the next
with seamless transitions.
Typically we cannot explain what we know from our procedural memory. When we
recall mental objects from procedural memory, the recollections are expressed as actions
rather than explicit thought. We can only “act out,” or perform, the tasks we have memorized
in this part of our memory. And we may only be able to perform the task under special
circumstances. For example, we may have to be primed to perform a certain task as when we
are led to perform it as a natural extension of the situation we are in at present. We may also
be led to perform the task by a cue such as seeing a particular situation, hearing a certain
word, or thinking about something very specific. In some instances, an expert can be led to
document, or tell, how a procedural task is performed by recalling a realistic scenario and then
explain it step-by-step from the beginning. The expert essentially simulates the performance
of the task.

Conceptual Memory

Conceptual memory is considered to consist of both episodic and semantic memories as

shown schematically in Figure 3-2. Everything we remember of what has happened and of
things that mean something takes the form of concepts. Concepts are considered to be
language-free, highly abstracted and partly codified to fit into our mental organization and be
used as our mental and associative building blocks.

Episodic Memory

Episodic memory stores recollections of personally experienced episodes and events as

they occurred without further analysis or integration into what we know. Thus, Tulving has
proposed that the mental objects we store in episodic memory are not (yet) knowledge.1

1 The Canadian psychologist Endel Tulving (1972) suggested that objects in episodic memory
can be contrasted with knowledge since they are not “tied down” and connected and
integrated with the main knowledge in our brains. Later, Tulving (1990) added extensive
insights into
other memory systems, including priming memory.
86 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Mental objects kept in this memory represent complex episodes1 that depict images and verbal
communications of a chain of events, including what we thought and felt at the time.
Tulving’s position that episodic memory contains information about an event, rather than
knowledge about the event, is founded on the premise that the version of the event stored in
episodic memory has not been analyzed and internalized although it most probably has been
abstracted and represented in a concise and efficient form. Since it has not been abstracted
and nothing has been learned about it or from it, it is not knowledge. To become knowledge,
whatever may have been abstracted and learned from the event will have been re-represented
and stored in semantic memory.
The episodes that we observe and remember -- our experiences -- are highly subjective.
Humans are not good observers. In all situations, we narrow our focus to a particular aspect
and only seem to remember that aspect to the exclusion of everything else.

Semantic Memory

Semantic memory is where we keep factual knowledge in the broadest sense and where
we attach meanings to this knowledge. It contains abstract, mental (cognitive) representations
and models of everything we know: facts, concepts, words, expectations, schemas, and many
other forms of knowledge. In semantic memory, we also keep our notions about relations
between the different mental objects. We have associations and categorizations. Mental
objects recalled from semantic memory are expressed as abstract thoughts (cognitions) rather
than behavior. Semantic memory appears to be divided into lexical memory and
encyclopedic memory.

Lexical Memory

Lexical memory is where we hold all our knowledge about language: words, idioms,
syntax, common expressions, and other structural and detailed information that we use to
parse and decode incoming messages. It contains the “semantic labels,” that is, the words we
associate with and use to describe specific concepts.
Lexical memory also contains knowledge of what we know. It is, in effect, an abstracted
overview of our knowledge, a lexicon of the knowledge that we have. It is about knowledge.
From a Western perspective, where we operate with written, often phonetic versions of the
words we pronounce, we tend to forget the symbolic-conceptual relations of the ideographs of
written Chinese or Japanese, and similarly, the signs used by the deaf, or icons used in
modern computer graphic interfaces. These symbolic-conceptual relations are also stored in
our lexical memory and may bear no relationship to the conventional semantic labels that we

1Working definitions of episodes and events are provided in the section on schema, scripts,
episodes, and events in Chapter 4.
Knowledge Seen from Different Perspectives 87

use as words in our spoken language.

The organization of lexical memory may differ significantly from person to person. Some
have highly developed language representations of their concepts -- they also “think in
language” -- whereas others (perhaps some 20% of all people) do not have strong semantic
labels for their concepts and do not think in words and language. They may think with
“concepts” or even “pictures” (i.e. visual representations).
Since we are quite different, we have considerably different strengths. However, the
absence of capabilities that the majority of the population possesses often is considered
“weaknesses.” This distinction is important when we consider a person’s competence.
Lexical memory -- as all our other memories -- displays specific characteristics. When one
characteristic becomes dominant (such as our ability to keep track of semantic labels), it
normally means having lesser capabilities in other areas, and vice versa. These differences in
degrees of dominances indicate that individuals will present a broad diversity of capabilities
and mental emphases.

Encyclopedic Memory

Encyclopedic memory contains the detailed knowledge itself -- encoded in abstract

representations whose form we can only guess at but which we picture as consisting of
hierarchies of chunks and concepts, schemas, scripts, “relational and associative nets,” and so
on. Many researchers subscribe to the opinion that encyclopedic memory is where we store
our language-free concepts. As for our other memories, location of encyclopedic memory is
spread throughout our cortex with separate areas specializing in particular functions.

Priming Memory

Priming memory is a nonconscious memory, which identifies and recognizes --

conceptually or perceptually -- words and mental objects as cues. When a valid cue is
recognized, it triggers a larger, associated “chunk” that can be quite extensive and complex.
“Priming is a type of implicit memory; it does not involve explicit or conscious recollection of
any previous experience. It has affinities to both procedural and semantic memory.”1
An example of conceptual priming is when I am planning a complex project and discover
resource contentions between critical tasks and automatically recall how I have handled
similar situations in the past. I associate the new situation with the previous ones and
remember the concepts for how to deal with it. An example of perceptual priming is when I
drive and see brake lights turn on in the car ahead, and I automatically start applying the
brakes on my car.
Our priming memory is full of associative links, which apparently point to knowledge
stored in semantic memory. For performance of expertise and for use of knowledge in

1 Tulving (1990) page 301.

88 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

decision situations and the like, priming memory is of utmost importance. From this point of
view, priming memory is the major repository of context-dependent cues and hence
contributes heavily to our capability to perform and exercise our expertise as part of our daily
work particularly if we are “practical knowledge workers” -- which most of us are. As we
will see below, we compile and automate the knowledge that we are experts in, and the
automated scripts and schemas may well be stored as a string of cues in our priming memory.

Why Do We Forget? -- Why Do We Remember?

One explanation for why and how we forget is based on the notion that the vividness of
our memories are a function of the strength of our associations. Associations between “the
present” and particular mental objects are very strong immediately after we have experienced,
thought about, or worked with the objects. As time passes, we encounter new experiences
and the mental objects associated with them become strong and prior associations are
gradually weakened. Weakened associations result in diminished ability to recall the mental
objects -- they are not connected as easily to the objects that are in the forefront of our
working memory. We have partially forgotten about them and will gradually forget more and
more about them as time goes by.
When we encounter situations that are known, or similar to what we have prior experience
with, the prior situations are recalled (often by analogy) and mental objects that we associate
with those situations can be retrieved with renewed strengths. It appears that when prior
situations are recalled, the old associations are also recalled. As a result, we are reminded by
having been primed by the experience.

A Memory Scenario

When I analyze the economics of two project alternatives and ascertain that all factors are
correctly represented and accounted for, I operate in conscious working memory. I use
information that I read in the papers on my desk as I proceed with the analysis. I first store
the information in conscious working memory, then in nonconscious working memory. Later,
after less than a minute, the information is available from the buffer memory. I draw on
judgmental and procedural knowledge from long-term memory of how I think the cost and
income factors should be represented in a case like this. I also draw on information stored in
the buffer memory about what I read on the last page and what I was told earlier in the day
about the actual cost and revenue numbers and the special conditions that pertain to this
project. These last items I am not likely to remember for a long time because they are not
important enough for me to commit to long-term memory. They are only of value in the
particular situation I am working with. However, I may find some aspects of this temporary
information to be of interest. In this case, I may choose to remember them by comparing
them to other knowledge that I have stored. Unbeknownst to me, however, I may also have
Knowledge Seen from Different Perspectives 89

passed on to long-term memory even the unimportant details that I do not care about. These
deeply buried details may be very difficult to access later except under very unusual
circumstances.1

Zola-Morgan’s Memory Categories

An interesting categorization of memory types in humans emerges from an understanding

of which brain locations are activated to store and retrieve different knowledge and to reason
in different ways. The memory type breakdown proposed by Squire and Zola-Morgan2 is
presented in Figure 3-3. It is based on mapping brain functions in conscious subjects using
noninvasive scanning methods. Subjects were asked to perform different mental tasks after
having been injected with a substance that made increased blood flow detectable through
noninvasive brains scans. This breakdown of memory functions does not, however, indicate
where some of the memory constructs we are interested in may fit. The more important ones
are schemas, scripts, episodes, reference case, associations, and chunking, which will be
discussed in the next chapter.

Figure 3-3. Squire and Zola-Morgan’s Different Memory Categories.

Memory

Declarative Nondeclarative
(Implicit)

Skills Simple Nonasso-

Facts Events & Priming Classical ciative
Habits Condi- Learning
tioning

1 Deep-seated, long-term memories have been recalled under hypnosis or under the influence
of mind-altering drugs such as scolapamine. They may not be accessible for normal use. As
result of such experiments, it is hypothesized by some that we remember everything that we
have seen, heard, experienced, or thought about. Practically, that capability is of little use.
2 Squire and Zola-Morgan (1991) describe their work with mapping the human brain locations

of different memory and reasoning functions using non-invasive methods.

90 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

It was found that when experiences are added to our nondeclarative memory, the new
memory content is used to govern behavior and our behavior is altered nonconsciously
without us “knowing about it” -- without access to the new memory content. In Figure 3-3,
nondeclarative memory includes, in addition to skills and habits and priming, the concepts of
“simple classical conditioning” and “nonassociative learning.” When experiences are added
to our declarative memory, on the other hand, the knowledge is explicit and we can access our
knowledge.
Recent research supports that our minds work as described above.1 Thus hippocampus
and adjacent brain structures play central roles in transferring perceptions from working
memory to knowledge in long-term memory and retrieving it for later use. This role of
hippocampus supports our understanding of cognition in the knowledge worker by pointing to
the existence of physiological mechanisms that act as transfer agents or bridges between the
different memories.

WHEN DOES INFORMATION BECOME KNOWLEDGE?

“You cannot drink milk within one hour of taking those antibiotics.” Tom was told. “Oh,
I didn’t know that. Do you know why?” “It is because the antibiotics will react with the
lactose and break down into inert components.” After having received this information,
Tom thought for a moment and said: “That makes sense, I see why.”
In this episode, Tom quickly related the new information to what he already knew about
milk, what takes place in the stomach, and the effects and functions of medicines. In this
process he did two things. He compared the received information with his prior knowledge
and ascertained that it was acceptable. He also internalized the new information by
remembering the episode itself; in addition, he formed associations and other links with prior
knowledge. He even added the aspect of “potential changes that can take place in the
stomach” to his mental model or schema for the functioning of ingested medicines. Tom had
changed the information into knowledge that he now held.

1 Squire and Zola-Morgan (1991) op cit.

Knowledge Seen from Different Perspectives 91

Warning!!
Our Memory Does Not Know Fact from Fiction!1
Our nonconscious reasoning capability is smart. We appear to reason in our nonconscious
in nonemotional and mechanical manners that allow us to perform complex, well-internalized
tasks automatically without thinking about what we do. Psychological studies indicate that we
have the nonconscious ability to identify and internalize very complex patterns that are not
explainable by the conscious mind and use these patterns to make discriminations for which
we do not understand the basis. For example, when we look at a photograph of a person’s
face and promptly judge that s/he is unreliable -- or trustworthy -- we most likely employ our
nonconscious discrimination capabilities.
Humans have a great facility for identifying patterns and forming hypotheses that are
generalized from limited information. This is a strength that allows us to detect threatening
conditions at early stages. But the same facility is also a significant liability when we use it to
create patterns and beliefs that are based on limited information and we continue to act on
them in the false belief that they represent “the whole truth.”

Our Biases May Be Both Arbitrary and Capricious -- Even Irrational!

Our values and beliefs are formed by what we believe to be true -- our knowledge. But
since what we believe to be true may be based on hypotheses that are generalized from
information that may be a subset of the whole story -- or even a slanted perspective that has
provided our minds with misinformation -- the truth may contain falsehoods. Our biases are
complex and often automatic consolidations of our values and beliefs, no matter how correct
or incorrect. We also form values and beliefs about future events based on an understanding
of causal relationships to project if potential outcomes will be desirable or undesirable. If our
understanding is formed from knowledge based on incorrect hypotheses, our biases will be
arbitrary. If it is formed from knowledge based on perspectives that are slanted to favor other
values and objectives, our biases will be capricious. Finally, if our understanding is formed
from knowledge that in part is imagined, rather than being real, our biases will be irrational.
From a different angle, even though our nonconscious is very capable and can work with
complex patterns that far outdistance what we can cope with in our conscious minds, it is
within the “emotional” nonconscious that biases can distort the way we act and interpret
situations. This is due to our nonconscious ability to create the complex patterns and
hypotheses that we cannot examine critically with our conscious reasoning and, therefore

1This section is in part based on of Dr. Pawel Lewicki’s work (The American Psychologist,
June 1992, and The New York Times, June 23, 1992, pp. B5 and B11)
92 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

cannot control.
Since we all appear to possess some knowledge that is partial -- developed from
information that has been interpreted through “colored glasses” or based on imagined or
misinterpreted information -- we all have some questionable biases. As part of our daily and
working lives, we observe a number of ambiguous situations that we interpret with our best
understandings and insights.
Based on the new situations and the way we interpret them, we unwittingly establish
biases that can only be fully available to our nonconscious. And as indicated, some of our
understandings can be based on false biases. According to psychological research, we
continue to observe ambiguous situations, we tend to interpret them with whatever biases we
have and, therefore, tend to strengthen the true and false biases -- they are self-perpetuating
and we rarely test the new conclusions against reality. By observing our world in this
manner, our biases can silently confirm themselves without proper scrutiny.
The major problem associated with this aspect of how our minds work is that the new
knowledge we create by observing the world around us may be misleading and wrong.
Unless we critically test knowledge, we may make serious mistakes in both decision-making
and knowledge work.

We Do Not Remember What Was Fantasy and What Was Reality!

Our memory has a serious flaw in that it does not distinguish between reality and what
was only imagined. Once we have imagined something, we remember it and are prone to
integrate it with the other things we know as if it were fact.
There are many reasons for why we may imagine something that really is not so. For
example, our memory is not always trustworthy and we may interpret a situation based on
something that we seem to remember and we may get it wrong. This happens frequently to
most of us. In such instances, we may say that the conclusion we arrive at was imagined.
Another reason for imagining is that our senses are not always as sharp as we would like. We
may not hear clearly what was said and may interpret the communication erroneously. Or we
may interpret wrongly what we see. Again, we may arrive at an imagined conclusion. We
can also be confronted with a complex reasoning task that exceeds our capabilities and,
therefore, get it wrong. Again, an imagined conclusion. Unless we are set straight about our
errors, we will believe our imagined conclusions and build their results into our value and
belief system -- into our knowledge.
The trouble is that we will not remember that there were uncertainties, ambiguities, or
potentials for imagined conclusions. Our minds frequently do not register and store the origin
of a piece of knowledge. As a consequence, we may have actual fantasies that we will
remember as facts, even without any factual foundation.
Knowledge Seen from Different Perspectives 93

OPINIONS AND JUDGMENTS OFTEN ARE BASED ON MISCONCEPTIONS

When learning on-the-job without proper guidance or in other nonmonitored learning

situations, we may develop understandings that are based on fiction instead of facts. People
will form abstract frameworks to explain their observations based on their best understanding
of the area. When their understanding is in part based on what they have imagined, the
framework is wrong -- and so is their knowledge. We have numerous examples of such
misconceptions ranging from unschooled chemical process operators who have totally wrong
beliefs about some cause-and-effect relations within their plants, to self-educated sales people
with clear -- but wrong -- judgments about how the market operates within their field, to
highly trained social scientists in some disciplines who hold diametrically opposite opinions
on causal relationships!
Our opinions and judgments -- our whole value system -- are based on our best knowledge
and on how we interpret the world. This is particularly the case for complex processes when
it may be difficult to distinguish underlying factors, the root causes, from symptoms. Our
work places are rife with such complex processes. We all struggle to master the interpretation
of interpersonal relationships. We also struggle to understand how our customers react and
what motivates them, what they want and need, and how well they accept our products and
services. Similarly, we struggle to develop good knowledge and judgments about how to
operate and how to attain effectiveness and excellence.
Since all these processes are both complex and poorly known, we tend to hold a spectrum
of varying opinions and judgments about them. Many of the opinions that are held by even a
small, sophisticated group may be at odds since they are based on personal interpretations that
again are based on personal and subjective experiences and biases -- some of them imagined
and others even irrational. Such opinion differences are often the source of unproductive
disagreements and discussions and may lead to highly arbitrary decisions. Worse, they may
lead to decisions that are trivial or wrong, and, at times, to no decisions at all instead of well-
conceived, creative, and proactive decisions that are part of implementing a strong goal
oriented strategy.
Anthropologists have long been aware of people’s tendency to explain and theorize about
areas that may only be partially observable to them and in which they have limited
knowledge. The self-propagation of myths and the generation of superstition that is prevalent
even in modern societies is part of this undesirable process. And the modern organization is
as vulnerable as any other in this regard! Here, we have one clue to what may produce an
ineffectual, nonintelligent, and stagnating organization!
In interviews, knowledge workers and “experts” often present imperfect understanding as
truths -- not to mislead, but because they firmly believe it!
 What Knowledge IS

Chapter 4
How We Organize and Hold Knowledge
This Chapter
As we consider how we deal with knowledge, it is important to identify how we organize
knowledge. We will discuss these issues briefly before we introduce nine characteristics of
knowledge: completeness; connectedness; congruency; perspective and purpose; qualitative
knowledge; certainty, uncertainty, and fuzziness; internalization; concept chunking and
hierarchies; and associations and relational connections.
Next we introduce abstract mental models -- schemas. We then discuss the way we hold
knowledge, focusing on procedural knowledge and how we embed, compile, and automate
knowledge. We also identify the “stagnated professional” and introduce the concepts of
competence and performance knowledge.
Since cause-and-effect and dynamic situations are very important, we present the dynamic
concepts of schemas and relations to scripts, events, and routines. We explain how we
automate knowledge to create routines, differences in our automation to create routines, and
we introduce reminding by way of shared schemas.
The concept of conceptual knowledge levels is introduced as a framework for categorizing
knowledge according to its abstract-concrete and rote/automated-strategic uses. We also
present four different types of knowledge holders: the professional practitioner, the practical
knowledge worker, the performer, and the communicating negotiator.
We then introduce differences between public, expert, and personal or tacit knowledge
and four corresponding knowledge types. Finally, we discuss the major manifestations of
knowledge.

Organization of Knowledge
For knowledge to be useful and accessible, it must be organized. In particular, for us to
apply knowledge effectively for a specific situation or problem, we must first organize it from
perspectives that allow us to handle the aspects of the situation that need to be managed. To
be most useful, knowledge needs to be organized according to the general purpose that we
plan for its use. Since knowledge may be targeted for use for different purposes, the same
basic knowledge may even be organized in different ways for each use.
We cannot organize knowledge in our minds by transferring it from one part of the brain
How We Organize and Hold Knowledge 95

to another. Nor do we apparently store knowledge that we have organized in different ways
in more than one location. Instead, we seem to set up complex and multiple links --
associations -- between mental objects and these links represent our organizational principles.
When I plan and evaluate the economics of a proposed project, for example, I require
access to my knowledge from several areas and perspectives. First, I must access knowledge
on project stages as they relate to work-breakdown structures and tasks to be performed,
schedules, resource requirements, profitability, costs, and general economics. I also need to
access knowledge on project stages from perspectives of completion-projection uncertainties
for similar projects in the past. This means that I must organize my knowledge on stages for a
specific project type to allow me to retrieve expectations for durations for each stage
(preferably as functions of project size,) uncertainties associated with the success of each
stage, with relevant associations to factors that may cause uncertainties or secure success.
Since I wish not only to evaluate project economics, but also to consider how the project
should be organized and managed, I structure my knowledge to include associations to project
organization options, their relevance to the project at hand, and so on.
When we organize knowledge, we deal with it in many ways. As it grows and its
organization improves, its characteristics also change. These changes must be observed in
order for us to understand the quality of the knowledge that we deal with in a particular
situation. This is true for knowledge we hold in our minds as well as for knowledge held in
knowledge bases.
A major problem for knowledge workers is that we do not organize all our knowledge
congruently. We might organize the same basic knowledge in different ways according to
intended use and we may automate within our minds part of it to deal with one or two areas of
expertise such as evaluating project economics. When an important knowledge factor
changes, such as the performance goals of our organization, we may change our judgments
and perspectives for situations that we have encountered in detail. However, we typically do
not reflect these changes at the same time in all the other perspectives and concepts where we
use the same knowledge. As a result, our knowledge in these cases will be noncongruent
until we revise all the affected perspectives and concepts.

Useful Characteristics of Knowledge

We need to understand several characteristics of knowledge to assess the quality and
nature of the knowledge that we possess ourselves or that we work with. Specifically, we
need to know what it means that knowledge is: complete; connected; congruent; which
perspective and purpose it represents; qualitative knowledge; its fuzziness or crispness; the
degree to which it has been internalized; chunking and hierarchialization; and its associations
and relational connections. Each of these aspects is explored below in this section.
96 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Completeness

Our knowledge in a certain domain may be said to be “complete” when we “know it all,”
that is when there are no areas where we do not have knowledge. However, this is never the
case since no person can know everything about a particular domain. There is always
something that is not yet known, or that we have not understood or fully internalized.
We do wish to be able to specify the degree of completeness of a knowledge base to
indicate how much knowledge it contains. Whether we deal with a person or a codified
knowledge base, we need to take a position on: “How much of the relevant knowledge is
available from this source?” At times, a person or knowledge base may contain all that is
presently known; yet that crucially important knowledge simply is not known by anyone. In
this case, although the knowledge base is complete, it includes insufficient knowledge for us
to perform the function as well as desired.

Connectedness

We say that our knowledge is well connected in an area when all knowledge sections and
the finer detail are properly connected. This means that there are well-understood and defined
relations between the different knowledge sections and that there are no -- or only a few --
knowledge sections and knowledge details that are totally disconnected from the remainder.
Hence, if our expert says: “I know how to calculate the net present value of this policy, but I
do not see that it means anything to the policy holder,” one may expect that the expert has not
yet developed much knowledge about the association or link between the net present value
and the overall economics of the policy from the policy holders perspective.
In practice, we never make all possible connections between all knowledge objects within
our minds. Of the untold billions connections that we could made, each takes reasoning and
time. To make all these connections, therefore, would take an impossibly long time. We
continually discover new connections, understand new relations, and are surprised to find that
a particular consequence is different from what we had thought -- all without learning any
new basic knowledge. Often we are forced to say to ourselves: “Oh, I hadn’t thought of that.
I know better!”
For experts, masters, even grandmasters, most possible connections between knowledge
objects have not yet been established. These individuals still are able to discover new aspects
about their expert knowledge domain, to learn important new things, or to discover new
relationships that they or no one else had thought about. As managers, we should not be
surprised to discover that the people who know best, do not know it all.
People have the flexibility to deal with incomplete connectives in our knowledge. When
we automate knowledge, however, we need to ascertain that the knowledge is well connected
to be useful.
How We Organize and Hold Knowledge 97

Congruency

We say that a body of knowledge is “congruent” when all facts, concepts, perspectives,
values, judgments, and associative and relational links between the mental objects are
consistent. This means that there are no logical inconsistencies and no internal conflicts or
misunderstandings in the knowledgebase or in the knowledge that a person holds. It also
entails that a concept linked to another concept in one situation means the same as when it is
linked to a third concept in another. For example, using the concept “Average Southwest
population growth,” in one situation I may mean “as measured for the 1980s by the 1990
census for the states of AZ, NM, TX, OK,” while in another I mean “as reported by the
Bureau of Statistics for the 1970s for NM, TX, OK.” If I use these different entities as basis
for comparison, my knowledge is incongruent.
It is indeed rare, that people have fully congruent knowledge bases. It may not even be
possible. For all of us, there are numerous areas of knowledge that we have not integrated
and coordinated. Since we have learned much of what we know from different sources, at
different times, with different perspectives, and for different purposes, very little of what we
learn is automatically congruent with what we already know. Further, not all that we learn
and adopt as knowledge is necessarily true either. And as a result, for our knowledge to
become congruent, we need to constantly work with it in our minds and check it out against
external sources -- “we need to mull it over and think about it” -- to establish new connections
and sort out misconceptions, inconsistencies, wrong understandings, and untruths.
When we receive new knowledge, we would like to incorporate it into all our perspectives
and concepts that are built on the new knowledge. We need to update existing connections or
establish new ones to reflect the new knowledge. That takes time and requires that we
“revisit” all our concepts and judgments once in a while. Most likely, we will never do this
since it takes inordinate time and mental effort. Further, as we learn more and more, the
number of knowledge fragments become so large that there will never be enough time to
make it all congruent! As a result, we all occasionally make statements such as: “I never
thought of it in that way and, of course, I am wrong and should have known better since I
already knew that .... !”
As for connectedness, when we automate knowledge, we need to ascertain that it is
congruent since our automated methods are not robust or flexible enough to deal with
incongruencies within the same knowledge base.

Perspective and Purpose

When we “know” something, we frequently know it from a particular perspective or for a

particular purpose with a specific use in mind. An expert customer representative said: “I
know that when a customer calls up to report problems with the lubricant he bought from us, I
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can frequently help him either with a different product or direct him to a competitor’s product.
In either case, he will continue to be loyal to us. But I also know that if I cannot help him, we
stand a good chance of losing him.” In this case, the expert’s purpose was to keep the
customer and his perspective was to maintain good relations. Therefore, the expert organized
his knowledge to serve those purposes and to be able to respond to the kinds of problems that
he normally encounters.
If I “know” that the dollar exchange with the English pound is 1.60, I typically have a
perspective and future use in mind. I might wish to perform some financial calculations, I
might plan to go to England, or I might wish to follow the dollar‘s strength to have an opinion
as to where our economy is headed. Finally, I might keep all of these and other purposes in
mind when I remember the exchange rate and organize that section of my knowledge that is
affected.
It appears quite clearly that we arrange much of our knowledge according to the purpose
that we plan to use it for. In addition, we may also store the intended purposes as cues in our
priming memory to evoke the relevant knowledge in semantic memory when we need it.

Qualitative Knowledge

There are strong indications that most of the knowledge we have is qualitative in nature
rather than precise and quantitative. Many things we know with great precision -- even
exactly -- like when I know that four times five equals twenty, or that those four books belong
to Jane and the two other books belong to Tom. Knowing that the procedure for submitting
my expense reports includes the need to submit the original receipts for all hotel and air
transportation expenses is also precise knowledge. To reason explicitly or “crisply,” say,
using classic logic and simple rules, we need to know the material in the form of precise
knowledge or we need to restructure it (often by excessive distorting idealization) into precise
knowledge form.
For the most part, however, we do not choose to remember things that precisely. Or we
may have perceived the original knowledge to be approximate, an arbitrary representative of a
general case, or have recognized other conditions that make the knowledge inexact. I know
that the two books belong to Jane, but I don’t know precisely how they belong to her. Does
she own them outright? Are they her brother’s? Did she borrow them from the library and
have to give back today? This information may not be important if all I need is to make sure
she gets the books back. As a result, much of what we know is qualitative in nature. When I
know that “Denver is located at a high altitude -- approximately one mile above sea level”
that is already approximate knowledge. It may not be qualitative, however. But when I know
that: “The Colorado mountains are tall and the New York mountains are only medium-sized,”
my knowledge is both qualitative and subjective (since a person who grew up in Rhode Island
may consider the New York mountains to very tall).
The qualitative nature of knowledge is more important when we deal with causal chains. I
How We Organize and Hold Knowledge 99

may know, for example, that “My income next year will be a little higher than this year.
Inflation will also be a little higher, I believe. I also know that taxes will be higher, all
considered.” When pressed, I can possibly provide brackets for the changes that I know will
take place, but I cannot provide precise numbers. If I want to estimate my disposable income
for next year as a cause and effect function of my knowledge of the independent factors, I
might find that my knowledge of the result is very questionable.
People often have highly questionable knowledge about outcomes from cause-and-effect
processes where their knowledge about the independent factors is qualitative. This is
particularly the case where the outcomes are functions of differences between uncertain
variables. What makes the matter worse is that people tend to form firm beliefs about their
predictions and may become very defensive about their positions when their knowledge is
highly qualitative and uncertain. This trait is often a problem among experts when we need to
rely on their knowledge. Just think about the different interpretations, recommendations, and
opinions that economic and other social science experts provide.

Certainty, Uncertainty, and Qualitative Opinions and Values -- “Fuzziness”

As mentioned, we often remember much of our knowledge with a fair amount of

uncertainty and qualifications. This is particularly the case with knowledge associated with
outcomes from event chains in which one event leads to another. In such event chains, we
often do not know with any degree of precision what the outputs of each link will be given a
set of inputs. As a result, we may be greatly uncertain about the behavior of the process and
particularly about the combined outcome.1 This way of thinking may also apply to complex
concepts with many factors and to areas that we are not very familiar with, where we have
limited knowledge.
In these cases, we apply qualitative or “fuzzy” thinking, and we categorize the aspects and
features about the mental objects in approximate terms. When describing our recollections,
for example, we may say: “The stock value can be expected to increase.”; “I know that the
situation was somewhat serious.”; or “I can remember that the contract price was reasonable
and the quality of the delivered goods was quite acceptable.”

Internalization and Understanding

We internalize knowledge, consciously or nonconsciously, when we encode and represent

facts, abstractions of situations, and so on, and commit them to long-term memory. We

1 The technologists point out that we may understand these event chains or scripts as
multidimensional, at times, parallel Markov Processes whose transition functions define the
relationships between the inputs and the outputs for each chain in the links. Such transition
functions generally are multidimensional and nonlinear and are probabilistic when
uncertainties are involved.
100 Knowledge Management Foundations:
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internalize knowledge further when we organize it by developing relations between

knowledge units, and when we think consciously and reason about what we know to develop
new perspectives, opinions, judgments, or strategies for how to approach new situations.
It has been hypothesized that we continue to work on, and internalize, our knowledge
when we dream and that part of our sleep is necessary in order for us to organize the
knowledge we have acquired during the day. We also appear to internalize knowledge when
we “daydream,” or think creatively and speculate about things. Similar to other mental
processes, internalization is not well understood. However, it appears to include:
• Transfer new knowledge in the form of information about perceptions into long-term
memory. Store episodes into episodic memory.
• Analyze and interpret the information to determine patterns and characteristics. Build
scripts from episodes and events.
• Develop relational and associative links between knowledge units.
• Develop new concepts, perspectives, judgments, and so on, consciously or
nonconsciously.
• Chunk individual knowledge units into larger and more abstract units. Start forming
schemas from scripts and episodes.
• Develop new knowledge during focused or intense reasoning situations, such as “mulling
it over” in one’s mind, discussing, listening, generalizing (as when being trained or
educated or learning in other situations), writing an analysis of a complex situation, or
synthesizing and planning new approaches.
This aspect of internalizing also includes situations where one is using knowledge to
solve problems that apply the knowledge one has but under slightly different conditions.
• Organize knowledge to make it more readily accessible. This includes “indexing”
knowledge for storing it into the lexical part of semantic memory.
So, when the CEO of the company speculates about corporate strategy while taking the
morning shower, he is not only thinking creatively but is also developing new ways of “seeing
things” and internalizing combinations of new and prior knowledge in the process! Part of
this process is illustrated schematically in Figure 4-1, relating five levels of internalization to
the degree to which we know something. Later, we will relate the degree of internalization to
how we can elicit knowledge and how we might support individuals at different levels to
perform quality knowledge work. In the figure below, we include small polar diagrams to
indicate conceptually the extent of knowledge present at each stage. We will describe these
“knowledge profiles” later.
How We Organize and Hold Knowledge 101

Figure 4-1. Degrees of Internalizing Knowledge.

Ignorant or Barely Aware

Is not aware of what the knowledge is
or how it may pertain to any
consideration or situation.
(Ignorant or Beginner)

Knows That the Knowledge Exists

Is aware of where the knowledge is and
where to go to use it. Cannot reason with it
and has little understanding.
(Advanced Beginner)

Knows about the Knowledge

Can use and reason with the knowledge
given external knowledge bases (books,
people, automated systems, etc.)
(Competent or Proficient Performer)

Knows the Knowledge

Holds the knowledge in memory,
understands where it applies, reasons with it
as required. Includes it in many concepts.
(Proficient Performer, Expert)

Internalizes Knowledge Fully

Has deep understanding with full integration
of knowledge into values, judgments,
reasoning, and concepts. Takes the
consequences of the knowledge.
(Master, Grand Master)

For us to understand, we need to internalize the knowledge, organize it, associate it with
prior knowledge, and build it into concepts and relate it to other concepts. By doing so, we
have made it possible, when faced with a situation or condition, to use the knowledge to take
positions to what it means -- to understand what the situation or condition is about and what
the implications may be. Understanding requires deep knowledge -- beyond factual
knowledge it requires well developed concepts and perspectives, and particularly expectations
and judgments. We also rely extensively on goal setting and systematic knowledge to
102 Knowledge Management Foundations:
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develop our understandings -- and within subject matters that we know well -- we have
transferred our knowledge into pragmatic and automatic knowledge.

Conceptual Chunking and Hierarchialization

We organize knowledge in our minds in several ways. “Conceptual chunking” is one of

the most common forms. When we form concepts, we typically chunk, that is, we assemble
several mental objects into a hierarchy. For example, we may assemble five to nine
subordinate chunks into a higher-level chunk to form a new concept or another kind of mental
object.1 We should think about the higher-level chunks as complex abstractions such as
concepts or even value-influenced objects such as expectations and judgments. Subordinate
chunks may also be complex and abstract mental objects, or when we come far enough down
into the chunking hierarchy, simple facts.
Another perspective deals with the number of knowledge areas we know at different
depths of understanding as we increase internalization. This relation is indicated
schematically in Figure 4-2. Advanced beginners know that many subjects exist, have
beginning knowledge of “some” areas, and have obtained working knowledge in a few areas
as indicated by the line left in the figure. Similarly, proficient performers know “some”
knowledge areas well and continue to internalize knowledge within those areas, organize it,
and develop judgments and perspectives to reflect the what the knowledge is and apply the
newfound understanding in all the relevant situations that they encounter. After continued
development, a proficient performer will become expert, and later master but still may only
have fully internalized “some” knowledge areas.
Figure 4-3 gives an example of a concept hierarchy for how we might organize several
chunks into a new chunk for “A Perfect Day.” Three hierarchical levels of chunking are
shown. However, there may be an untold number of chunking levels in the hierarchy. In
addition, since we rely heavily on associations, the way we organize our knowledge may also
include complex networks with cycles, feedback loops, and other kinds of connections. It is
entirely possible, for example, for the person in our example to include “Having What it
Takes” twice, once in the concept for “Feeling Fine” and a second time as an independent
chunk in the next level up, as shown.
An interesting feature of expert knowledge is that higher-level, more abstract chunks
typically are quite flexible. As in this example, “A Perfect Day” could be made up in a
number of different ways. “Going Nice Places” may not even always be a required factor in
the chunk. And even when it is, the number of acceptable “nice” places may be large.

1Readers may be familiar with George A. Miller’s 1956 study on chunking: “The magical
number seven, plus or minus two: some limits on our capacity for processing information.”
Miller established that humans are able to “chunk” five to nine simple entities, such as single
numbers, into more complex entities. The chunking concept has since been embraced to
hypothesize more complex groupings as indicated in this chapter.
How We Organize and Hold Knowledge 103

Figure 4-2. What We Know -- and Don’t Know.

Number of
Knowledge Areas
Thousands
Knowledge Areas
That Are
Not Known
Hundreds
Ma
s te
P r
Pe rofi
rfo cie
rm nt
Many er
A eg
dv in
B

an ne
ce r
d

Some

Knowledge Areas
A Few Known with
Varying Depths of
Understanding
Depth of
Understanding
None
Area Is Area Is Area Is Area Is Area Is
Known Somewhat Reasonably Well Fully
to Exist Known Known Known Internalized

As a result, when an abstract concept is important to an expert’s knowledge and reasoning

process, this concept often has great flexibility and can be used differently under different
conditions. That is, it may be a generalized schema that translates into many more specific
scripts that together may represent a plethora of different states for many different conditions.
Thus, it is typical to hear a knowledge worker saying: “Yes, I told you that the loan
application was quite acceptable with the debt-to-income ratio up to 0.4; that was appropriate
under those circumstances. But this situation is different. Even a ratio of one-to-ten would
not be good enough!” The states within the general schema-concept of “Loan Application
Acceptability” can vary a great deal depending upon the circumstances. And that, of course,
is no surprise!
104 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Figure 4-3. Concept Hierarchy -- Chunking of Concepts and Other Objects to Create
the Chunk “A Perfect Day.”

A
Chunks Perfect
Day

Being with Going Having

Good Feeling Good Nice "What It
Friends Fine Weather Places Takes"

Breakfast
With Rested Sunny Spending
w/ Friends
John Weather Money

Going to
With In Good Mild Trans-
the
Elisabeth Spirits Breeze portation
Beach

No Not Going
With Sports
Jobs too for a
Karl Equipm
to Do Hot Sail
No Cool
With Seing an
Nagging Quiet Clothes
Kathy Exhibit
Crises Evening

Clear
With Feeling Hearing a Concert
Night w.
Al Romantic Concert Tickets
Moon
Having Coming
With Comfy
What It Home
Tom Home
Takes "Early"

Associations and Relational Connections

In addition to forming chunking hierarchies, we also appear to organize knowledge in our

minds according to perceived and observed (experienced) relations and associations between
the different knowledge units. To a large extent, these relations and associations are
established according to our experiences. They are also established according to associations
formed through various types of reasoning such as “this chair is similar to this table” where
How We Organize and Hold Knowledge 105

the similarity may be based on a number of things. For example, it could be caused by
recognizable patterns like the overall style, the way the wood is finished, the details of the
carvings, and so on. It could even be that we have seen a similar chair and table in the same
room somewhere in the distant past. We seem to have untold ways of establishing patterns of
similarities.

Figure 4-4. Example of Concept Relatedness and Relational Knowledge Represented as

Concept Relationship or Associative Network.

Swimming
Optometrist Sharks

Nearsighted Dolphins
Beach
Sunglasses
SeaWorld
Vacation
Drive
June
14-29 Commute Traffic
Jams
Repairs Car
Work
Funny
Noise
Dealer Plant
Visits Office

Telephone
John
Car Pool Gas Telephone
Prices Numbers
Peter
Payments
Budget

We can often depict small areas of our knowledge with relational diagrams of the kind
shown in Figure 4-4. In this figure we have shown the relatedness of concepts in a
stereotypical segment of human memory centered around a person’s concept of car. The
shorter lines represent greater relatedness or stronger association between the concepts.
The associations and relations that we develop in our minds have different strengths,
ranging from: “This is the very same car I saw last week”; “This flower may be of the same
family as the ones we have in our garden”; to “This color reminds me of a sunset.” We use
the strength of our associations to express uncertainties and degrees of relevance. We think
qualitatively. Further, the relations can be of many different forms. For example, we can
106 Knowledge Management Foundations:
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think: “This spoon is a silver spoon”; “Tom came to the restaurant before Mary arrived”; or
“The steel rope is stronger than the sisal rope.”
Some relationships are formed so strongly in our minds that we consider them to be facts.
And when we as “knowledge engineers” elicit and codify knowledge, we may represent some
of these relations on paper or in a computer with deterministic declarations or rules. Others
we may represent with fuzzier relationships to reflect qualitative considerations, uncertainties,
or situations where the relations have limited or questionable relevance. An example of a
relationship with limited relevance is: “This chemical develops cancer in mice. Therefore, we
expect that it also will develops cancer in humans.”
Within our minds, we intermingle chunking hierarchies and associations. That is, a chunk
may consist of a set of associations or another chunk. Within a set of associations, the
knowledge items may either be whole chunking hierarchies or individual chunks. As an
example, when using the associations listed in Figure 4-4, I think closer about the knowledge
item “Drive,” I immediately recognize that this concept is built up from numerous other
concepts which together form a chunking hierarchy.

Schemas -- Abstract and General Mental Models

As people observe, work with, and gain better understanding of a knowledge area, they
organize their knowledge into higher abstractions to capture and explain (within their minds)
the general salient characteristics of the area -- they generalize to create schemas in their
minds. Schemas are well-developed, higher-level mental models and understandings of the
knowledge area and exclude most of the detailed knowledge that pertain to specific conditions
or situations. Schemas are developed particularly for complex situations or conditions where
they help organize understandings and perspectives of how similar “systems” are arranged.
The schemas capture general patterns, features, and concepts that are shared by these systems
and may, as we understand them, partially identify how the different features and concept
relate and vary for different conditions. The full extent of a schema is tacit -- it is
nonconscious -- and is typically inaccessible as explicit knowledge.1
Apparently, we have two types of schemas: image schemas and proposition schemas.
The image schemas contain our abstract visual representations while proposition schemas
contain our language-based representations. In constructing our schemas we appear to
employ analogies and metaphors and, at times, we may base the schemas on physical world
models. Since physical world structures are well formed and broadly experienced, our
metaphors often carry structures from physical world models into nonphysical, abstract
domains. And we use these relations as representations in our schemas.

1Schank (1979) proposes a general memory structure, the “Memory Organization Packet”
(MOP) that corresponds closely to the concept of schema and relates to scripts like schemas
do.
How We Organize and Hold Knowledge 107

Expertise reflects the reorganization of our schemas that represent categories of situations
and conditions within the area. The schema reorganization also reflects the acquisition of
understanding and specialized methods for dealing with broader categories of situations
encountered in the domain.
The knowledge we hold in the form of schemas is to a large extent held as concept
hierarchies and associations modeled with associative networks. When we hold our
knowledge as a concept hierarchy, more detailed concepts or chunks can be specific scripts,
episodes, or events. They can also be more explicit mental building blocks such as collections
of facts, images -- or almost any other representation. In some instances, when we automate
knowledge in an area, the chunks within a schema can also contain specific routines.

The Way We Hold Knowledge

When we work with knowledge as part of our daily life, other aspects of organization
beyond those discussed above become important. For example, we tend to change the
organization, the accessibility, and efficiency of the knowledge we hold, the more we become
familiar with the subject matter and the more facets and details we learn about it. In
particular, as we become more familiar with an area, we tend to create shortcuts in the
required reasoning, create large numbers of pre-established perspectives, judgments, and
solutions; we may even start forgetting some of the underlying premises for why things are
this way.

PROCEDURAL AND EMBEDDED KNOWLEDGE -- COMPILING

AND AUTOMATING KNOWLEDGE

When a person develops knowledge about a particular field, the beginner initially
represents the knowledge declaratively in the form of facts such as: “When I push on the door,
it opens unless it only swings towards me.” The beginner also reasons explicitly with this
knowledge whenever s/he is using it. As a result, when the beginner approaches the door,
s/he must think consciously about how it should be operated and what the results will be.
As the beginner practices and becomes an advanced beginner the knowledge starts to be
"proceduralized." The advanced beginner no longer needs to reason explicitly but approaches
the door, knowing precisely how to operate it and what the consequences will be. The
advanced beginner almost always can explain what s/he knows, how knowledge is arranged,
and how it is to be used. The only problem is that this knowledge is still small, it is
incompletely integrated (it is not yet tied down or congruent), and it is sparse, with holes, and
may be full of misconceptions and inconsistencies. The advanced beginner often bridges gaps
in his or her knowledge with assumptions, “wild leaps” of beliefs, and at times with invented
fictions that are totally wrong.
As the advanced beginner becomes a competent and later a proficient performer, used
108 Knowledge Management Foundations:
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areas of the knowledge frequently start to be automated and compiled. After having been
through a situation many times, the advanced beginner starts to remember quite well what the
reasoning is and what its results are. In addition, having experienced the situation many
times, the person has verified that practical experience confirms the reasoning and tends to
remember that as well as a separate item. With these specific memories in mind, the
knowledge of this general kind of situation -- how it can be recognized, how it should be
handled, and what the expected results are -- becomes readily available.
As further experience with similar or identical situations is obtained, the knowledge is
automated and, therefore, no longer requires conscious reasoning. As suggested, it may
become part of priming memory and be based on sequential cues. When the proficient
performer approaches the door, s/he does so without considering how it is to be operated.
That is, operation of the door has become totally automatic and requires no discernible
intellectual effort. Just seeing the door provides the cues for how it should be operated.
The competent performer and proficient performer also proceed to "chunk" the knowledge
to form larger knowledge objects in the form of perspectives, concepts, expectations, and
automatic reactions to more complex situations. The larger knowledge objects are aggregates
of simpler knowledge chunks and may at times be quite abstract. A young loan officer starts
to build up understanding of, and judgments about, what “adequate cash flow projections” are
and what the conditions and elements are necessary to make them “adequate.” While the
proficient performer has a fair capability to explain what his or her detailed knowledge is,
typically, however, this capability is better for the knowledge areas that presently are under
development (being learnt) than those that are well practiced. The capability to explain has
started to become less accessible, or may even be lost, for those knowledge areas that have
been automated and compiled.
The combined effects of automating and chunking knowledge lead to compilation of
knowledge. When knowledge is compiled, the whole set of related perspectives,
understandings, ways of handling, and expected results are remembered together. Thus, it
appears that relational links are created and internalized between associated knowledge units
in the various parts of long-term memory.
As part of the knowledge automation process that takes place in a person’s mind, the
approach to identifying a situation and its handling may be “stored” together and be highly
accessible when the situation presents itself. At the same time, the deeper knowledge
associated with understanding the situation and the more detailed knowledge components for
explicit reasoning about the situation may become much less accessible. In fact, in many
situations, if this underlying knowledge is not used, it may be totally forgotten. When that
happens, the person has lost flexibility to change perspectives and judgments when the world
changes. As a result, the expert becomes rigid and inflexible and may have to go through
deep retraining when conditions change to prevent continued use of outdated judgments and
perspectives.
As the proficient performer continues to work in the field and becomes an expert and later
How We Organize and Hold Knowledge 109

a master, almost all the established knowledge has becomes compiled and is now "embedded"
as a well-integrated and internally consistent body of knowledge. This is the case, for
example, when a commercial loan officer builds up the complex concept of “the soundness of
the loan application” from simpler perspectives like the adequacies of cash flow projections,
management talent, market projections, and degree of competition -- each one of which is a
complex concept and perspective and is, in turn, aggregates of yet less complex and abstract
knowledge building blocks.
As discussed, practical side-effects are associated with knowledge development in humans
that affect the way we think about and manage knowledge. When a person is an advanced
beginner and competent performer, it may be relatively easy to survey and characterize what
that person knows. But his or her knowledge is not yet very valuable. Later, when the person
becomes a proficient performer and is more knowledgeable and experienced and loses the
ability to explain what s/he knows, it becomes much more difficult to obtain a detailed
understanding of the person’s body of knowledge.
Further, the experienced person’s body of knowledge also becomes very large. In
addition, the knowledge in the specific area of expertise becomes linked to other knowledge
areas as understanding develops of special relationships between the specialty area and other
areas under many special circumstances.
As discussed below, it is still possible to identify and characterize the expert’s knowledge
in terms of his or her proficiencies in the various knowledge sections without excessive effort.
But when we need to identify detailed knowledge for purposes of codification or building
knowledge-based systems, it may become necessary for professional knowledge scientists to
elicit and model the knowledge.

THE CASE OF THE STAGNATED PROFESSIONAL

An interesting side-issue of this insight is that many professionals appear to become “too
set in their ways” after several years as experts in their field. Their knowledge may even
become so outdated that their value as experts is lost -- they have become liabilities instead of
assets. They are counterproductive and use of their knowledge may cause considerable harm.
Often these individuals have automated their knowledge as rigid routines and use these
routines in reference cases for personal case-based reasoning without validating them for the
new situations and just relying on previous experience.
This does not mean that these people should be “discarded” or let go. Instead, they should
be reeducated to using their intellectual capabilities in ways that are of value to their
employers. For example, they may be channeled into new areas or may be given broader and
more flexible perspectives by providing them with scripts or schema knowledge that allow
them to reason better in varying situations.
Typically, people who have been valuable experts have considerable insight and
intellectual capacity, resources that should be exploited in new ways. Also, their outdated
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knowledge may apply to only one or two of more than a dozen knowledge areas. Since they
know the organization, the customers, who to network with, and many other areas, they may
need only to be redirected in a few areas. However, this takes careful management and
planning.
In may professions it is recognized that after a highly creative career of 5 to 10 years, one
should change specialty and start afresh in a new or an allied field. After a decade as an
expert, most people become “stale” and their contributions are no longer as innovative and
relevant as earlier. Such changes frequently lead to highly valuable contributions with new
perspectives that at times have revolutionized the new area. In managing knowledge and
knowledge workers, we should bear this in mind and consider re-channeling excellent minds
that may have become stagnated.

COMPETENCE AND PERFORMANCE KNOWLEDGE

From yet another perspective, we can identify that most knowledge in people is found to
be either competence knowledge or performance knowledge. This perspective is based on the
notion that having heard and read about something and having formed opinions about it from
a theoretical perspective differs greatly from being able to use the knowledge in practical
situations.
Competence knowledge typically is textbook knowledge, manuals, and descriptions of
past experience. It is viewed retrospectively, idealized or abstracted, divorced from its use in
time (it is diachronic), or may be newly synthesized while elicited and explained for the first
time. Competence knowledge is knowledge of knowledge where we abstract our
understanding of the knowledge we hold. However, in the process of abstracting we often
simplify details. Hence, the competence knowledge becomes idealized and yields less than a
complete overview of the true knowledge. It is mainly composed of goal-setting (idealistic)
and systematic knowledge.
Performance knowledge consists of the detailed knowledge that allows us to “do a job” or
perform a task. We may observe it as verbal or physical spontaneous expressions of thoughts
and learned reactions, or “think-alouds.” It is executed in real time (it is synchronic), specific
to an individual, and is often only observable in knowledge-intensive activities. Performance
knowledge consists predominantly of pragmatic and automatic knowledge.
At times, we associate performance knowledge with skills or “know-how” without deeper
understanding -- just sufficient to perform certain tasks. At the same time, we may associate
competence knowledge with deeper understanding of the subject matter. This view, however,
may not always be correct since as knowledge workers become increasingly proficient, much
of a persons’ deeper understanding in the form of schemas and scripts will become available
in the form of pragmatic and automatic knowledge.
The normal evolution of proficiency may lead to simultaneous improvements in both
competence and performance knowledge, perhaps as indicated in Figure 4-5 for a hypothetical
How We Organize and Hold Knowledge 111

-- but quite common -- knowledge worker. As knowledge becomes internalized, compiled,

and automated as “performance knowledge,” proficient performers and masters lose their
ability to explain what they know, unless parts of their knowledge is still maintained as
“competence knowledge.” The procedural knowledge that advanced beginner and competent
performers possess is, to a larger extent, explainable by them, particularly as long as they are
learning the subject matter. But, since they are still learning and since their knowledge may
still have holes and misconceptions, it still is not highly valuable.

Figure 4-5. A Hypothetical Model for How Competence and Performance Knowledge
May Grow with Increasing Proficiency.
Percent of Domain Knowledge
100%

80%

60%

40%

20%

Competence
Knowledge

Performance
Knowledge

Innocent Beginner Novice Apprentice Journeyman Expert Master Grand Master

Proficiency Level

Schemas, Scripts, Episodes, Events, Routines

-- Knowing about Cause-and-Effect
and Dynamic Situations
We tend to build well-organized knowledge about dynamic and complex situations that
we encounter regularly. Some situations deal with daily occurrences like unlocking, entering,
112 Knowledge Management Foundations:
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starting, and driving off in our cars. Others may be less frequent like hiring and training new
coworkers. We learn to handle these situations more or less expertly, and we can go about
mastering them in many different ways.
We also generalize our understanding of static situation knowledge in schemas. For these
purposes, we hold our knowledge in many forms: as associative nets (concept relationships
through associations), hierarchies of chunked concepts (concept hierarchies), isolated
complex concepts, production rules, episodes (in our episodic memory), and so on.
Associations play a particularly important role in our knowledge organization. We
organize knowledge that we have about cause-and-effect situations according to explicit
factual knowledge of relations or in the for of associations (sometimes these are identical).
For example, we may associate the outcome (the effect) of investing in new manufacturing
machinery with increased quality and production rate and reduced costs. Often, though, our
knowledge of the effects is qualitative. That is, we do not know precisely how much
improvement to expect from a certain investment, nor do we know how long it will take or
what all the other outcomes will be.
Our knowledge about these evolving, dynamic situations is based on our understanding of
what to expect and how to handle them. It falls into several categories depending on how
concrete or abstract our understandings are and how complete our knowledge is. Our
capability to handle these situations also varies considerably. What we know about situations
can be put into four categories:
Events: The isolated occurrences within a particular situation. Events are concrete and
detailed and are the numerous distinct steps that occur as the situation unfolds. Events are
normally observable and are typically, by themselves, without context and meaning.
Episode: A relatively independent incident or scene that occurs in the context of a larger
situation -- a script or story line. As such, episodes have meaning. An episode is the
collection of distinct steps that we observe as the situation unfolds. We may choose to
divide a situation into many episodes depending on which detail we wish to work with, or
episodes may be relatively aggregate entities consisting of several events.
Script: A general event sequence that underlies a referenced type of situation. Scripts are
flexible, somewhat abstract, and include general expectations and directions. Typically
scripts consist of several steps that include episodes and events.
Scripts are in many ways similar to routines. The main differences are that scripts and
their steps are general, broad, and flexible instead of the routines’ specific and unvarying
steps. Accordingly, compared to routines, hiring scripts may cover a range of positions,
not only competent professionals as in the example.
Schema: Broad and conceptual plan or scheme for a class of situations. Schemas are
concepts or mental models by which a static or dynamic situation can be characterized and
understood. Schemas are typically abstract models of a generalized situation. Scripts --
often several -- can be generated from schemas to form more definite expectations for
evolutions of quite specific situations. (See also the section on Schema.)
A quite different knowledge category is the routine that consists of an automated “how-to”
sequence of steps. As we become familiar with a particular process, much of it becomes
How We Organize and Hold Knowledge 113

automated -- automatic -- and results in a routine. However, we may never routinize all steps
in a script for how to handle a situation.
Routine: Regular, often unvarying procedure for what to expect and how to handle a
specific kind of situation. A routine is detailed, concrete, and inflexible. It consists of
numerous and relatively deterministic, rigid steps that might cover many of the tasks of
the process. Other tasks may require explicit reasoning (they are still part of the script that
underlies the routine).
We develop high-level schemas after gaining good understanding of the general principles
of the situations we experience. Scripts are more concrete and limited than schemas,
therefore, requiring less abstraction and understanding. Often several scripts are generated
by, or fall within, a schema. Routines are very narrow and concrete, typically covering only a
single type of a situation. A script may cover many routines, whereas routine covers the
sequence of concrete events within the situation.

Figure 4-6. A Hierarchy of Schemas, Scripts, Episodes, and Events.

Schema
ABC

Script A

Script B
Routine B/C

Episode A-1
Event
Routine A-2
Routine A-3 Episode B-1
Event Event
Routine B-2 Episode B/C-1
Event
Routine B/C-2

A simplified hierarchy of the categories is shown in Figure 4-6. We show a general

schema that covers the general situations A, B, and C. Scripts for the more special situations,
A and B, can be generated from this schema. These scripts are built up from episodes and
events and hold expectations for how these episodes and events will unfold.
When a situation becomes very familiar, the schema can be automated -- most often after
a script has also been generated -- into a highly automatic routine. The routine, in turn, also
consists of episodes and events, but follows a much more rigid mental construct with much
firmer expectations. In fact, if the events and episodes fall outside these expectations, they
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may make it impossible for a person to follow the routine unless she possesses a good script.
The actual routine may start earlier in the process than illustrated. It will also extend
beyond the steps shown and consist of hundreds of subevents. Routines may have
considerable room for variance to allow for branching when different, but acceptable and
understood conditions materialize.

DEVELOPMENT OF SCHEMAS, SCRIPTS, AND ROUTINES

Several approaches may be used to developing our knowledge about schema-event

hierarchies. We will examine some of these later when we discuss different models for
learning in Chapter 6. Figure 4-7 provides a conceptual illustration of how we develop this
kind of knowledge “bottom-up.”
The bottom-up situation is similar to learning on the job where we observe and participate
in the individual events and episodes that take place as the situation unfolds. As we observe a
situation, initially the events appear to be isolated, with no discernible connection or
sometimes mysterious relations. As we continue to observe the events, however, we start to
identify patterns and relationships and begin forming rudimentary routines in our minds. At
the same time, we also start to make generalizations about what we observe to create the
beginning of a script.

Figure 4-7. Process of “Bottom-Up” Development of Schemas, Scripts, and Routines

from Observed Events.

SCHEMA Emerging Developed

Schema Schema

Initial Improved Excellent

SCRIPT Script Script Script

Event Event
Event
Continued
EVENT Observations
Observe Observe Observe
Events Further Even More

Rudimentary Simple Good Routine Excellent

Routine Routine Event Routine
ROUTINE Event
Event Event
Event
How We Organize and Hold Knowledge 115

As we observe further, we continue to build our concepts for what transpires in the form
of improved routines and scripts and we start to generate general models in the form of
schemas. After we have had the opportunity to observe for considerable periods of time, we
will develop good routines and further abstractions in terms of scripts and schemas. There are
indications that in order to develop excellent routines and scripts, it is necessary to base these
on both detailed observations of events from numerous situations and the broader, higher-
level understanding represented by well-developed schemas.

HOW AUTOMATIC ARE OUR ROUTINES?

All of us are familiar with a large number of situations and, therefore, carry a large
repertoire of routines, scripts, and schemas in our minds. We know these with different
degrees of familiarity and levels of abstraction. We mentioned that as a person increases his
familiarity with a situation, he gradually internalizes and organizes his knowledge and
becomes able to respond quickly -- almost automatically -- to the situation. Thus, he is able to
analyze a situation and make relevant decisions by accessing pre-organized knowledge and
apparently without much explicit reasoning. In other words, he has “automated” his
knowledge. The knowledge is often automated in the form of a routine where the person has
internalized concepts, expectations, and judgments for each sequential step that typically
occurs in the situation.
Even though he is highly familiar with the situation, his knowledge does not need to be
based on a deeper understanding. Indeed, it may be shallow, even operational and concrete.
This happens when a person has acquired good skills in performing particular functions or
tasks without developing abstract, theoretical understandings of the underlying mechanisms
and phenomena. Advanced beginners and competent performers often display these
characteristics and some continue to remain on this level unless they are aided by education.
They know what to do to handle the situation, but they do not know why. As drivers of our
cars, most of us operate on this level -- we are competent, but ignorant performers. In these
situations, we may at most have tacit back-up scripts and schemas that only can be evoked by
priming.
On the other hand, a person who has only been introduced to the abstract and theoretical
aspects of general situations may never build knowledge of the practical routines required to
perform in the situation. Such a person often possesses only “academic” and theoretical
knowledge that may have been obtained by education. Consequently, the person will not be
able to perform practical work until trained in the field. We recognize this type of person as
the well educated recent college graduate or the hopelessly impractical university-professor
stereotype who has great theoretical familiarity with the situation but no practical knowledge.
Individuals with deep general understanding often have explicit access to their scripts and
schemas, which allow them to reason with their knowledge to a much larger extent than those
who have tacit knowledge in these areas.
116 Knowledge Management Foundations:
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As we have indicated, it is possible to have deep knowledge with abstract generalizations

and still have low familiarity with the situation (the youngster right out of school.) On the
other hand, it is also possible to have shallow and concrete knowledge while being highly
familiar with the situation (the competent, but ignorant performers.) The general relations
between depth of general understanding and degree of operational familiarity is illustrated in
Figure 4-8. In this figure, we have indicated how people’s knowledge may vary in terms of
the schemas, scripts, and routines they command at various levels of familiarity and
understanding.
The relationships indicated in this figure are important when we identify how we may
augment the knowledge in our associates or when we determine how to collaborate with them.
We also use this perspective to evaluate how to improve knowledge flows by pooling
knowledge with knowledge-based systems.

DOES EVERYBODY GENERALIZE KNOWLEDGE TO THE SAME EXTENT?

Figure 4-8. Relations Between Schemas, Scripts, Routines, and Events and Depth of
General Understanding and Degree of Operational Familiarity.

Depth of General
Understanding

Deep One Emerging Some Many

Knowledge Schema Schemas Schemas
with
Some Many Very Many
Abstract Scripts Scripts Scripts
Generalizations

A Few Some Several

Average Emerging Scripts Scripts
Knowledge Scripts
with
Some Many
Some "One"
Routines Routines
Generalization Routine

Shallow One Emerging A Few Some

Routine Routines Routines
and
Concrete Some Isolated Many Very Many
Knowledge Events Events Events

Low Average High Degree of

Familiarity Familiarity Familiarity Operational
Requires Readily Automated Familiarity
Elaborate Accessible Knowledge
Retrieval Knowledge
There are many ways of making generalizations. One way that we are particularly
familiar with is the unfortunate tendency to draw premature conclusions about characteristics
from limited observations. For example, when a foreigner on his first visit to the U.S. is only
How We Organize and Hold Knowledge 117

introduced to a wealthy suburb of a Mid-Western city, he may generalize that: “All

Americans drive new cars and live in one-family houses on large lots. They are very affluent
and are active in their community and in their church.” This type of generalization is shallow
and quite different from the generalization of knowledge that we consider when we build
understandings of scripts and schemas.
It appears that people vary considerably in their ability or inclination to generalize
knowledge. This may partly be an inherent trait, but frequently it is a result of a person’s
education and general knowledge. Individuals who have obtained experience in, and
internalized approaches to, analyzing patterns and finding relationships between abstract
entities appear to have a greater tendency to generalize and create broad scripts and schemas
from observations but do so with great care. This is similar to our tendency to change our
cognitive style as a result of the approaches and strategies we have acquired and that have
become part of our automatic behavior.

ACHIEVE PROFICIENCY -- THE NEED TO INTERNALIZE KNOWLEDGE

To achieve any degree of proficiency in a particular area, we need to have specific domain
knowledge “at our fingertips.” The only way we can obtain that level of familiarity with
specialty knowledge is to internalize it to a considerable extent. That is, the particular domain
knowledge needs to be well embedded within our overall knowledge structure. The
knowledge needs to be included in all pertinent associations -- the way it is to be used -- and
its applicability needs to be well understood and easy to recall -- either by cues (through
priming memory) or directly as pertinent options for what may be used in relevant situations.
In order to internalize knowledge to that extent, particularly “production” knowledge, we
need to work extensively with it. We need to practice its use, often over and over again, to
increase our familiarity with the basic knowledge, its variations, and the different ways it can
be handled. We recognize this from the way we learn basic arithmetic, to our ability to read
and write, and to more complex, professional tasks such as the loan officer discussed earlier,
who needs to work with hundreds or thousand of cases before becoming a master. It is
estimated that for a chess player to become a grandmaster, s/he needs to play tens of
thousands games. Similarly, a musician needs to play her/his instrument for about 5,000
hours to be admitted to a first-rate music school and must have played the instrument for
some 10,000 hours to be considered a professional musician.

PRIMING OR REMINDING THROUGH SHARED SCHEMAS

When we meet a new situation and are reminded of another episode, situation, or concept,
we often find that concepts or episodes are very different on the surface but share consistent
similarities on an abstract level. We actually can identify that they either share the same
schema or that their schemas are close analogs. We are able to detect generic characteristics
that the two situations share. Schank provides some interesting examples. One is:
118 Knowledge Management Foundations:
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“X’s daughter was diving for sand dollars. X pointed out where there were a great many
sand dollars, but X’s daughter continued to dive where she was. X asked why. She said
the water was shallower where she was diving. This reminded X of the joke about the
drunk who was searching for his ring under the lamppost because the light was better
there even though he had lost the ring elsewhere.”1
In this example, X sees the two situations as sharing the same schema although their
scripts are quite different. X was reminded about the prior story, not directly, but by sharing
the more general and abstract schema. This illustrates an interesting and powerful mental
mechanism that we often employ to see analogies and to draw associations. This mechanism
is in part based on our pattern-matching capabilities that help us identify and compare
complex similarities between characteristics that often are highly abstract.

OBSERVATIONS ON ROUTINES AND RIGID BEHAVIOR

We have all met people who are good at their jobs but only follow one particular routine
for each kind of task they are responsible for. The moment events fall outside established
routines, they become very uncomfortable and try to change things. They may exclude the
event as being inadmissible or try to change the situation to force it to fall within one of their
routines. Their rigid behavior is indicative of shallow knowledge without deeper
understanding in the form of script and schema knowledge (unless they are in a situation
where they are forced to adhere to a prespecified routine). With deeper understanding that
allows them to use a more flexible script, they often become both able and willing to handle
considerable variations from their normal routine.
To become less rigid, these people need to be provided with the routines for the situations
they encounter frequently, scripts for those that they encounter less frequently and where they
need flexibility, as well as schemas for the more general understanding and for the way all of
it is connected. That is, they need to be trained in the routines and educated in the scripts and
schemas.

Four Conceptual Knowledge Levels

Our use of knowledge varies with how it is organized and perceived. In particular, we
arrange knowledge on four conceptual levels. Our perspectives of where these levels fit into
our daily work are very important as we provide ourselves and our associates with the
necessary knowledge to perform with the high quality, creativity, and consistency we desire.
The four levels are also important when we try to understand what happens around us when
people use knowledge and when we evaluate how much they know and which kind of
knowledge is required for different tasks.
We ask: “What do you have to know, and how do you need to know it, to make decisions

1 Schank, 1982, page 47.

How We Organize and Hold Knowledge 119

and do your work?” These issues are separable. What we have to know is a direct function
of the tasks we perform. How we need to know it pertains more to the workstyle we adopt to
use the knowledge. Do we wish to reason explicitly and vigilantly with our knowledge? Do
we wish to make quick decisions based on well-developed judgments? Do we need to handle
the situations automatically without discernible decisions as part of our normal workflow?
There are many options for how we may wish to use knowledge and, therefore, the degree we
need to know it or have it at our fingertips.
From a cognitive perspective, we use selected, often partly understood knowledge to
represent the extreme in ideals and sophisticated concepts to form our goals and beliefs. To
guide our insight into “how things work” we use other knowledge that may be more
theoretical and general and often better understood. Explicit knowledge that pertains directly
to the tasks we perform is used to reason with and to make deliberate decisions. Finally, we
have some knowledge with which we are so familiar that we have automated it and are able to
use it without thinking. Thus, we use knowledge on four conceptual levels:
Goal-Setting or Idealistic Knowledge or Vision and Paradigm knowledge. Part of this
knowledge is well known to us and explicit -- we work consciously with it. Most of it,
our visions, is not well known; instead, it is tacit and only accessible nonconsciously. We
use this knowledge to identify what is possible and to create our goals and values.
(“Knowledge of WHY” the ideal is desirable and obtainable.)
Systematic Knowledge or System, Schema, and Reference Methodology Knowledge. Our
theoretical knowledge of underlying systems, general principles, and related problem-
solving strategies is to a large extent explicit and well known to us. We use this
knowledge to analyze and reason in-depth and to synthesize new approaches and
alternatives. (“Knowledge THAT” it is possible, methodologies exist, and it can be
achieved.)
Pragmatic Knowledge or Decision-Making and Factual Knowledge (Know-How).
Decision-Making knowledge is practical and mostly explicit; it is often based on scripts
that we know well. We use this knowledge to perform our daily work and make explicit
decisions. (“Knowledge HOW” it can be achieved.)
Automatic Knowledge or Routine Working Knowledge. We know this knowledge so well
that we have automated it -- most has become tacit. We use it to perform tasks
automatically without conscious reasoning.
We can illustrate the nature and use of the different conceptual knowledge levels using
examples as indicated in Table 4-1. In these examples, we have suggested what a junior and a
senior control engineer may know on the different levels. Much of the knowledge that the
junior engineer holds as higher, less familiar and accessible level knowledge is moved to
lower, more practical and familiar knowledge levels in the mind of the more expert senior
engineer. This evolution is normal as people gain expertise.

GOAL-SETTING or IDEALISTIC KNOWLEDGE -- Vision and Paradigm Knowledge

Top-level goal-setting or idealistic knowledge guides our thinking and motivation, helps
120 Knowledge Management Foundations:
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us to generate our goals and ideals, and provides us with insights that enable us to observe
situations from several perspectives. To a large extent, such knowledge governs “what we
think is possible and desirable” and “what we think is the very best that could be achieved.”
Goal-setting knowledge is the knowledge that fires the imagination! When we reason or
solve problems, when we choose tactical approaches, when we explore to find new strategies,
we are usually driven by our idealistic knowledge. Examples of this highly influential
knowledge include:
• Vision of how the business can be structured and organized -- which products,
competitive strategies, operational practices, personnel practices, corporate culture
features are required -- to become the undisputed business leader.
• Paradigm for pursuing total quality management -- new perspectives, new values, new
judgments required, old judgments invalidated, new practices, new incentives, etc.
• Knowledge of how office and knowledge work should ideally be performed and how that
goal might be achieved by gradually introducing new work practices and support tools.
• Knowledge of which expectations, advantages, and disadvantages can result from
pursuing various advanced risk-management strategies when trading specific
commodities.
We use idealistic knowledge extensively in two ways: (a) direct our motivation and
actions towards the ideal that we perceive is possible and that we would like to pursue; and
(b) provide a gestalt of the situation with broad perspectives that allow us to reframe it (i.e., to
change the terms of reference). We also base most of our beliefs on our idealistic knowledge.
Further, in a “generate-and-test” situation, we use this knowledge to provide us with both the
goals for generating new alternatives and higher-level (nontechnical) criteria for judging
performance of the alternative.
How We Organize and Hold Knowledge 121

Table 4-1. Examples of Knowledge at Different Conceptual Knowledge Levels.

Conceptual Knowledge Junior Senior
Levels Control Engineer Control Engineer
IDEALISTIC Knowledge Knowledge of: Knowledge of:
Vision, Goal, & Paradigm • Possibilities for applying • Advanced ideals for plant
Knowledge Optimization Theory in performance
Provides basis for goals & values combination with process models • Performance achievable with
to guide & decision-making. • Potentials for advanced fuzzy, intelligent computer
Produces beliefs, values, & some Human-Computer interfaces control
nonconscious judgments. • Ideals for plant performance • Vision for enterprise-wide
Sketchily known & partly integration of control/
accessible information/ management
Often associative, primed, & • Neural Net Theory &
episodic Applications
Mostly Nonconscious
SYSTEMATIC Knowledge
System, Schema, Methodology Knowledge of: Knowledge of:
Knowledge • Analyzing multivariable control • Advanced Optimization Theory
Complex background system dynamics applied to very complex plants
knowledge. Used for in-depth • Optimization Theory. • Advanced Stability Theory
analysis of specific situations & • Stability Theory. • Cognitive Engineering for
synthesis of new solutions. • Basic Sciences Human-Computer interfaces
Requires cognitive effort & • Applied Mathematics • Basic Sciences
concentration, used elaborately • Control Engineering Principles • Advanced Applied
Often associative as large Mathematics
chunked semantic nets
Mostly Conscious
PRAGMATIC Knowledge Knowledge of:
Decision-Making & Factual Knowledge of: • Diagnosing multi-loop behavior
Knowledge • Tuning 3 mode controller • Stability theory rules
Used to reason explicitly with • Diagnosing single loop • Identifying correct control loop
when making decisions. behavior wiring & hook-up
Provides the basis for explicit • Identifying correct control loop • Control engineering principles
knowledge work. Well known & wiring & hook-up • Automatic analyzer selection
easily used • Selection of correct sensors • Designing analyzer sampling
Often scripts, rules, judgments • Programming programmed systems
& procedures controllers
Mostly Conscious
AUTOMATIC Knowledge
Routine Working Knowledge Knowledge of: Knowledge of:
Used automatically without • Determining stability of single • Tuning 3 mode controller.
explicit reasoning to recognize loop controllers • Diagnosing single loop
situations & conditions, analyze • Laying out components in behavior
them, & make decisions (by control loop design • Selection of correct sensors
handling them automatically) • Programming programmed
Often automated routines, controllers
procedures, & “reactions” • Determining stability of a loop
Mostly Nonconscious • Laying out control components
122 Knowledge Management Foundations:
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We obtain idealistic knowledge from many different sources. On the personal level we
read, discuss, see what others have done, and may generate visions and paradigms when we
speculate on what is possible. On the corporate level we obtain idealistic knowledge through
benchmarking and internal development, and from the visions of knowledgeable individuals.
One important aspect of idealistic knowledge is an understanding of the organization’s goals
and objectives and their derivatives that should guide everyone’s actions and decisions.
When we explore or create, we synthesize and to be effective, synthesis must always be
goal driven. More to the point, to be creative and really valuable, synthesis must be based on
a vision -- a view of what ideally should be sought. Therefore, it becomes very important to
facilitate development of such visions as part of any problem-solving, design, or Decision-
Making process. However, since we always are presented with new problems and decision
challenges, it is often impossible to develop corresponding visions after the challenge has
materialized. As a result, in any intelligent-acting person or organization, it is very important
to pre-establish a broad inventory of goal-setting idealistic knowledge to facilitate ad-hoc
development of opinions and judgments on what might be sought in a variety of situations.
The broader a field these perspectives cover, the more valuable they are.

SYSTEMATIC KNOWLEDGE -- System, Schema, and Reference Methodology Knowledge

Systematic knowledge provides general models and organized understanding of, and
theoretical background for, the situations and conditions that we deal with, particularly the
complex ones. It includes our understanding of how all kinds of systems work, that is, what
their internal mechanisms are and what their behavior are likely to be when manipulated or
“perturbed.” This knowledge also provides us with methodologies and guides us with
principles for how we handle situations. Selected examples of systematic knowledge include:
• Knowledge of how organizational systems work and behave, how people interact, how
cultural changes can be implemented, and how effectiveness can be affected by particular
changes, etc.
• Knowledge of basic sciences, specific sciences, scientific principles, mathematics,
categorization systems, etc.
• Schemas and scripts for how friendly social conversations normally are conducted and are
likely to develop.
• Schemas and scripts for achieving modern management practices such as total quality or
business process reengineering.
• Methodologies for how to implement risk management strategies.
• Methodologies for how to proceed with investigations or other kinds of task.
• Schemas and scripts for various kinds of reasoning, problem-solving, and decision-
making.
We use Systematic knowledge as background and reference knowledge for in-depth
analyses to investigate particular aspects of situations under consideration. As implied in the
How We Organize and Hold Knowledge 123

above examples, our systematic knowledge spans our whole body of knowledge and is used
for all kinds of reasoning and problem-solving purposes. For example, in “generate and test”
reasoning situations, we use systematic knowledge both to develop the details of the generated
solutions and to estimate expected behavior to test their validity.
Systematic knowledge is obtained in many ways. Normally, we think of education as the
standard mode of obtaining this kind of knowledge. However, it is also developed
extensively from self-study and from generalizing when we create scripts from observations
and later when we generate schemas from scripts.

PRAGMATIC KNOWLEDGE -- Decision-Making and Factual Knowledge

Knowledge on this level consists of the rules, facts, and explicit concepts that we use
consciously when we reason and make decisions as part of our normal knowledge work. To a
large extent, it is “how-to” knowledge and “know-how.” Examples of pragmatic knowledge
include:
• Knowledge of how to deal with normally occurring management situations within one’s
area of responsibility.
• An experienced team leader’s expert knowledge of how to organize and supervise quality
teams.
• Knowledge of how to perform the daily aspects of one’s normal specialty, such as how to
operate a computer and how to write inter-office memoranda to achieve the desired
effects.
• Knowledge of how to deal with one’s subordinates to provide them with directions,
motivate them, monitor their work, etc.
• Knowledge of how to implement a particular risk hedging strategy step by step.
Pragmatic knowledge is used directly to make decisions that are based on conscious
reasoning. We use this kind of knowledge all the time. Whenever we reason consciously to
perform our knowledge work, or in any other situation, we are likely to draw on our
pragmatic knowledge. In a “generate and test” situation, we use pragmatic knowledge to
reason explicitly about such things as what the features should be of the next alternative that
we generate, what its strengths and weaknesses might be, and so on.
We obtain pragmatic knowledge from a number of sources. We receive it from training,
some education, and when our coworkers tells us how things work and are to be done. We
also develop pragmatic knowledge when we figure out how things work and how we need to
deal with them.

AUTOMATIC KNOWLEDGE -- Routine Working Knowledge

Knowledge on this level is fully internalized and we use it without thinking. We handle
situations automatically using this knowledge. Examples of automatic knowledge include:
124 Knowledge Management Foundations:
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• Knowledge of actions to take on routine management issues that “happen all the time”
and, therefore, do not need special consideration.
• Knowledge of handling interactions and group leadership in quality circles.
• Knowledge of placing orders for a commodity contract once the size and contract source
are decided.
Automatic knowledge is used to guide highly routinized actions. When we codify and
document knowledge or embed it in systems and procedures, technology, and organizations,
or in active, knowledge-based systems, it may represent different levels. In fact, however,
different knowledge repositories tend to favor particular levels selectively.

Some Conceptual Levels Have More Explicit Knowledge Than Others

Knowledge on the different conceptual knowledge levels varies in explicitness. While

some is well known and quite explicit, some is tacit, either because it is not well known or
because we have compiled it to where it has become automatic. The approximate amount of
tacit and explicit knowledge that we have is shown qualitatively in Figure 4-9.

Figure 4-9. Approximate Amounts of Tacit and Explicit Knowledge for the Four
Conceptual Knowledge Levels.
Amount of
Knowledge
All Tacit
Explicit

Explicit
Tacit

Most

Half
Explicit

Tacit

Tacit

Explicit

Some

None
Automatic Pragmatic Systematic Idealistic
Knowledge Knowledge Knowledge Knowledge
Knowledge Levels

As we become more expert in a subject matter, we tend to shift knowledge from one level
to the next in the direction of the arrows illustrated in Figure 4-10. When beginners first are
introduced to a subject matter (as shown to the left in the figure), they normally possess very
limited idealistic knowledge. Depending on the type of education or training they will have a
little systematic knowledge, beginning pragmatic knowledge, but no automatic knowledge.
As they become more accomplished (moving to the right in the figure), people add
knowledge items (on all levels, not only on the top level as indicated in the figure). In the
How We Organize and Hold Knowledge 125

process of becoming better acquainted with and internalizing the knowledge, they integrate
and build associations for some of the idealistic knowledge whereby it becomes systematic
knowledge.

Figure 4-10. Schematic Illustration of How Knowledge Shifts Between Cognitive Levels
as Expertise Increases.
Conceptual
Knowledge Levels

Idealistic
Knowledge

Systematic
Knowledge

Pragmatic
Knowledge

Automatic
Knowledge

Beginner Advanced Competent Proficient Expert Master

Beginner Performer Performer
Proficiency Levels
Note: Each symbol represents a different area of knowledge. The size of the symbols indicate the amount of
knowledge commanded by the individual at the different levels of expertise.
Some of the systematic knowledge is built into rules, judgments, and concepts for direct
work and is migrated to become pragmatic knowledge. Furthermore, people are able to
automate some of the pragmatic knowledge to make it automatic knowledge as they become
thoroughly familiar with the subject matter and it becomes routine.
What is not illustrated in Figure 4-10 is that as we learn and understand more some
decision-making knowledge is generalized and becomes higher-level systematic knowledge
and may gradually also become idealistic knowledge. From our understanding of these
processes, we can see that people often hold the same general knowledge quite differently.
For example, what is idealistic knowledge for a beginner or performer may be well-known
pragmatic knowledge for a master -- and may even be automatic knowledge for a
grandmaster.

The Four Conceptual Levels Can Be Found At All Abstraction Strata

Knowledge workers have broad understandings of many knowledge domains. Some of

these are relatively concrete while others are sophisticated and abstract. Figure 4-11
illustrates six typical knowledge domains that knowledge workers and most of us know with
different abstraction and sophistication. The six most common knowledge areas are:
126 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

• Knowledge about Knowledge and Thinking about Thinking

• “World Knowledge” of Society, Science, People, etc.
• Knowledge of Adjacent Work-Related Domains
• Knowledge of Primary Work-Related Domains
• Knowledge of Private Life, Hobbies, etc.
• Basic Knowledge of “Walking,” “Talking,” 3 Rs, Social Skills, etc.
A person’s most unsophisticated and concrete knowledge may be associated with basic
physical and social skills, including basic communication and reasoning skills. On a higher
abstraction stratum, we can find knowledge of both principal and adjacent professional
domains. On yet a higher stratum is general “world knowledge” and knowledge of basic
principles in the world around us -- whether social or scientific. Finally, on the highest
stratum, we may find knowledge about knowledge and thinking about thinking. This domain
also encompasses religion, reasoning behind basic beliefs, and philosophy. Our knowledge at
all strata is held at all conceptual knowledge levels as also indicated in Figure 4-11. On closer
inspection, we will find that idealistic knowledge typically is held with greater abstraction
than systematic knowledge, and so on.

Figure 4-11. Hierarchy of Six Typical Knowledge Domains That Knowledge Workers
Command to Different Extents.
Strata of Increased Knowledge of Knowledge &
Abstraction & Sophistication Thinking About Thinking
Idealistic
Systematic
Pragmatic
Automatic

"World Knowledge" of
Society, Science, People, etc.
Idealistic
Systematic
Pragmatic
Automatic

Knowledge of Knowledge of Knowledge of

Adjacent Work-Related Domains Primary Work-Related Domain Private Life, Hobbies, etc.
Idealistic Idealistic Idealistic
Systematic Systematic Systematic
Pragmatic Pragmatic Pragmatic
Automatic Automatic Automatic

Basic Knowledge of
"Walking," "Talking,"
3Rs, Social Skills, etc.
Idealistic
Systematic
Pragmatic
Automatic
How We Organize and Hold Knowledge 127

A MEASURE OF THE AMOUNT OF KNOWLEDGE -- THE SEMESTER HOUR

EQUIVALENT

We often require to express the amount of knowledge present or needed. A convenient

(rather qualitative) measure is the amount of knowledge retained by a B+ student in one
semester hour -- the semester hour equivalent, or SHE. That means that the knowledge
retained in a one-semester course equivalent is 3 SHE, and in a full college education over
100 SHE, and so on.
Theoretically, if a person used twelve hours, seven days in every one of 52 weeks to learn,
it would be possible to obtain 273 SHE in a year.1 Similarly, learning on the job with 100%
efficiency and constantly being confronted with new learning situations could lead to an
annual knowledge accumulation of 125 SHE. Such learning efficiencies are clearly not
practically attainable but may be considered extreme upper limits of the new knowledge a
person can obtain.
As we have discussed, knowledge is obtained with different efficiency by different
individuals. Some learn very quickly and internalize and retain with great ease. Others are
not as quick. As a result, individual differences play a great role in the amount of the
knowledge a person obtains. The exposure to learning situations and material is equally
important and even an avid learner may obtain little new knowledge if forced to perform
routine work in an unchanging environment for long periods.
People obtain new knowledge from many domains and at different conceptual knowledge
levels. Early in life, we struggle to learn very basic knowledge for basic life functions -- how
to walk, talk, interpret and handle the world around us, and so on. Later, as we enter school,
we learn the “3 Rs” and similar basic knowledge. However, during this period, we also start
to form abstract mental models of all the events that we observe and learn about. We form
judgments and expectations for how the physical world functions and create complex models
that stay with us for the rest of our life. Later, we then become exposed to more advanced
learning in high school and college, until we start learning on the job or in specialized training
programs that focus on our work environment. All this knowledge provides us with
perspectives and ideals that later become more concrete as it becomes systematic until, with
more learning and familiarity, it becomes pragmatic or automatic.
It is possible to illustrate qualitatively the approximate knowledge held by a person at
different conceptual knowledge levels and in different domains, thereby obtaining an
overview of that individual’s “knowledge inventory.” This is illustrated hypothetically in
Figure 4-12 for a competent performer with four-year college education after three years on
the job. In addition to knowledge of the primary work-related domain, this individual has a
little exposure to adjacent domains, but has much to learn in that area, in the area of “world
knowledge,” and in the primary area to become a versatile expert.

1Assuming that one semester hour represents the knowledge retained during 16 contact hours
with no homework required.
128 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Knowledge Holders and Cognitive Styles

People have different cognitive styles. Some are wizards at remembering and using
numbers. Others are good at solving puzzles. There are people who are very good at
explaining complex concepts and intricate relationships. Some people are verbal with
excellent commands of language. Others, also very intelligent, are not very verbal but
instead, they see things in terms of pictures or images and think in terms of concepts without
labels.

Figure 4-12. Amount of Knowledge Held by a Hypothetical 26 Year-Old Competent

Performer with College and 3 Years of Practice.
CKL Knowledge of Knowledge &
Thinking About Thinking
Idealistic
Systematic
Pragmatic
Automatic Semester Hour
1 10 100 1000Equivalents

CKL "World Knowledge" of

Science, Society, etc.
I
S
P
A SHE
1 10 100 1000

CKL Knowledge of Adjacent CKL Knowledge of Primary CKL Knowledge of

Work-Related Domains Work-Related Domains Private Life, Hobbies, etc.
I I I
S S S
P P P
A SHE A SHE A SHE
1 10 100 1000 1 10 100 1000 1 10 100 1000
Basic Knowledge of
CKL "Walking," "Talking,"
3Rs, Social Skills, etc.
I
S
P
A SHE
1 10 100 1000
How We Organize and Hold Knowledge 129

To some extent, we can understand some of these differences from our models of memory
and the ways we organize knowledge. For example, as individuals, we may favor episodic
memory over semantic memory; nonconscious reasoning over explicit, conscious reasoning;
hierarchical organization by chunking over relational linking of our knowledge units; and so
on. As discussed, part of these differences in style are also caused by our hemispheric
dominance.
We may also know our knowledge areas with different depths and hence have automated
and compiled it to different extents. When two experts have worked in the same area for the
same number of years, they will have worked on different cases and seen different situations.
They have different sub-areas of expertise and have not compiled, automated, and internalized
precisely the same knowledge areas to the same extents. Instead, they have developed
different associations, their reference cases are different and, because their initial backgrounds
are different, their “world-perception” is also different.
As a result of all these variations, people operate differently, exhibiting varying behaviors
with regard to what they know. We have categorized knowledge holders into four types to
separate the different behaviors that we meet. The four types are:
1. Professional Practitioners
2. Practical Knowledge Workers
3. Performers
4. Communicating Negotiators
In the same way that people are different knowledge holders, they also have different learning
styles as will be discussed in the next chapter. However, as far as we know, the different
learning styles do not correspond directly to the knowledge holder types.

Professional Practitioners

Professional practitioners possess well-organized and developed overviews of what they

know. One can hypothesize that they have thought a great deal about their work and have
internalized extensively the relations between knowledge units. In particular, they appear to
have organized the lexical part of their semantic memory to a great extent, although they also
understand the meanings behind important factors. They can explain principles and they may
think of their role as explaining, clarifying, and teaching.
However, professional practitioners may not be able to explain things in detail better than
other knowledge workers. Therefore, when they attempt to go into detail, they may provide
idealized details that may not correspond to reality. As one knowledge scientist said about
professional practitioner experts she had interviewed: “When squeezed, they lie! They don’t
admit that they cannot explain it. But they are great at providing a valid overview of the
whole domain and what is important and what takes second place.”
Typical professional practitioners are teachers and academicians, or scientists and
engineers. They often work on basic or “classical” problems as consultants or highly
130 Knowledge Management Foundations:
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proficient experts in any organization and may take on the roles of “systematizers” and
educators. Professional practitioners in general will have a greater proportion of idealistic
and systematic knowledge than their counterparts.

Practical Knowledge Workers

The majority of the real-world experts and masters are practical knowledge workers.
They know perfectly well how to do their jobs but cannot explain how. They have difficulty
explaining the principles and methodologies behind what they do. They also have problems
explaining the detailed deliberations and decisions they make. Yet, they are often unequaled
in their proficiency. They appear to keep a large amount of their expertise in procedural
memory. Other aspects of their expertise is held in priming memory, and they often need to
be cued by the context of their work to remember to do certain things. Much of their work
occurs automatically and nonconsciously. As a result, they frequently are not able to provide
a coherent narrative of how they work even as they perform their tasks. Also, as a rule, they
cannot describe how they normally deal with specific routine situations unless they actually
are performing the task.
These characteristics make it difficult to understand what the practical knowledge workers
do and to elicit knowledge from them using interviews or protocol analysis from verbal
protocols. However, they may be able to explain parts of what they do in great detail, but
without much systematic perspective since they consider each situation much like an isolated
event. The practical knowledge workers’ knowledge is to a large extent performance
knowledge. Typical practical knowledge workers are craftsmen, technicians, many engineers,
plant operators, and knowledge workers in general.
Practical knowledge workers possess a significant portion, if not most, of the
organization’s expertise. Their knowledge is tacit it is very important to find ways to
explicate it and make it part of the organization’s permanent knowledge assets. In general,
practical knowledge workers will have a greater proportion of systematic methodology and
pragmatic knowledge than their counterparts.

Performers

Performers live in the present and work by spontaneous production based on well-
internalized and practiced skills. Their performance knowledge appears to stem from
procedural memory although by their deep practice they often have developed a well-
organized and structured knowledge base that they may keep hidden since to them it is only
“background knowledge” that is not called for when they perform their tasks. Their
knowledge is also highly automated as performance knowledge. Their role is to take action
and make things happen. Typical performers are actors, many military commanders, sales
people, and also people of all kinds who like to “show off.” Performers in general will
How We Organize and Hold Knowledge 131

demonstrate a greater proportion of automatic and other tacit knowledge than their
counterparts.

Communicating Negotiators

Communicating negotiators are more concerned with the process they engage in rather
than the knowledge they have. Their objective is to obtain agreement by managing the
communication process between parties and their motivational status to obtain acceptable
outcomes. Typical communicating negotiators are found among commodity traders,
insurance sales people, politicians, line supervisors, and physicians while interviewing
patients.

General Perspectives

The above descriptions may indicate that a knowledge holder always behaves according to
a single model. That is not the case, however. Knowledge holders may behave as
professional practitioners for one knowledge area and practical knowledge workers for
another. They may also exhibit a mix of behavior models for yet other areas. However, we
do expect that people tend to have a dominant knowledge holder behavior that they would
adopt if possible.
It is important to recognize these four types of knowledge holders to understand the
different behaviors we meet. Just because a person cannot explain verbally in a fluent manner
what s/he knows about his or her job we cannot draw conclusions regarding the extent,
proficiency, and value of the person’s work-related knowledge. Similarly, we need to
approach the various types of knowledge holders differently to communicate and collaborate
effectively with them and to be able to understand their contributions and expertise -- their
strengths and weaknesses. Communicating negotiators in general will possess a greater
proportion of idealistic knowledge than their counterparts.

A Generic View of Knowledge

We need a general view of knowledge when we work with a particular situation and
structure what is known and how that relates to what we need to do. We ask: “How does
what is known relate to how we want to perform this business task?”; “Is the knowledge
available at the point-of-use appropriate?”; “Is the knowledge applied at the time of maximum
impact adequate?”; and “How can we augment the available knowledge with training, other
people, or automated reasoning in knowledge-based systems?”
We use this general view of knowledge as a guideline when we communicate with
knowledge holders or elicit and model knowledge. For this purpose, we use three forms and
four types of knowledge to characterize what we observe. A matrix overview of the forms
132 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

and types of knowledge is provided in Table 4-2, indicating the nature of the knowledge in the
different form-type combinations.

Table 4-2. The Three Forms and Four Types of Knowledge.

FACTUAL CONCEPTUAL EXPECTATIONAL METHODOLOGICAL
Knowledge Knowledge Knowledge Knowledge
Types Facts, Data, Perspectives, Judgments, Reasoning
Known Concepts, Hypotheses, Strategies,
Forms
Causal Chains Gestalts Expectations Methodologies

Textbook Knowledge, Generally Accepted Commonly Methodologies &

Public Mathematical Points of Views, Accepted Working Strategies Taught
Knowledge Models, & Public Concepts, & Hypotheses & in Classrooms
Computer Models Perspectives Implications

Specialized Expert Concepts, Expert Judgments & Expert Strategies to

Shared Understandings for Perspectives, & Expectations for Investigate,
Expertise "What It Is" & "How Overviews of Narrowly Understood Analyze,
It Works" Complex Situations Situations Synthesize, &
Manage

Personally Held Private Ways of Personal Intuitive Notions

Observations, Viewing Situations Value Judgements, about What to Do,
Personal Information, & from Single or Expectations, How to Proceed &
Knowledge Understandings of Multiple Beliefs, & How to Arrive at
"How It Operates" Perspectives Misconceptions Conclusions

THREE FORMS OF KNOWLEDGE

When we consider knowledge from a generic and more of a macroscopic perspective, we

need to define it in terms that are different from those used when we deal with knowledge in
humans or are concerned with its fine detail. We are satisfied with identifying the general
nature of the knowledge areas and sections that we deal with, where we might find them, their
availability, and how easy they are to access. For this purpose, we distinguish between three
general forms of knowledge:
1. Public Knowledge -- The Most Accessible Knowledge is predominantly explicit, taught
and shared routinely, and generally available in the public domain. Public knowledge is
primarily systematic although some is idealistic and pragmatic.
2. Shared Expertise -- The Proprietary Knowledge Assets is exclusive knowledge held
either by knowledge workers and shared in their work, or embedded in technology and
other proprietary manifestations. It may be explicit albeit then often communicated by
specialized languages or representations. Shared expertise is primarily pragmatic
knowledge although this type of knowledge also includes idealistic and systematic
knowledge, and experts may refer to automatic knowledge.
3. Personal Knowledge -- The Least Accessible and Most Complete Knowledge -- exists
How We Organize and Hold Knowledge 133

tacitly in people’s minds and is used nonconsciously in work, play, and daily life.
Personal knowledge consists for a small part of automatic knowledge. The majority of
personal knowledge, however, consists of idealistic, systematic, and even pragmatic
knowledge that is not explicated or clearly understood.
Personal or tacit knowledge is the most basic form of knowledge. It is the most detailed,
the most complete, and often the best integrated knowledge that exists in most cases. It is also
the first manifestation of knowledge about any subject. The two other forms of knowledge --
shared expertise and public knowledge -- are derived from personal knowledge through long-
term knowledge acquisition and codification.
When we prepare to acquire, pool, or use knowledge, we must understand which form of
knowledge is required and what its expected quality will be from the available sources. We
need to know how complete the knowledge we seek is likely to be and how easy it will be to
access.1
In Figure 4-13, we indicated the general completeness and availability of public, expert,
and personal knowledge. We also express the hypothesis that knowledge found in the public
domain is a subset of the shared expertise of all experts everywhere. Shared expertise, in turn,
is a subset of what all knowledgeable individuals -- as a group -- are expected to hold in their
private minds. As we know, there are exceptions; for example, we can find public knowledge
that is both complete and quite inaccessible, and we can find private knowledge that can be
both quite accessible and rather incomplete. We need to understand the varying nature of
knowledge as it exists in people, in books and other knowledge repositories, and in active
reasoning systems such as decision support systems that include computerized knowledge-
based systems.

Public Knowledge -- The Most Accessible Knowledge

Public knowledge is generally available in the public domain. For the most part, it is
explicit, shared broadly, and taught routinely. It is found in books, taught in classrooms, or
exists as just “general knowledge,” which is so ubiquitous that it at times is considered to be
obvious. Common knowledge (different from “common sense” discussed elsewhere) is
public, but much public knowledge is not common knowledge. For example, knowledge on
how the Environmental Protection Agency requires that information be structured on permit
applications for disposal of hazardous chemicals is public, but hardly common. While much
of public knowledge is codified and available as external knowledge some of it, is held by
people as personal knowledge, but is still generally known and shared.

1 In the past, all knowledge originated with people. We have recently seen the emergence of
automatic learning systems that to a simple extent can generate new knowledge from
information and existing knowledge by “reading documents” and “observing” the world to
form new patterns and new hypotheses that the systems then verifies automatically. As this
trend continues, we may see considerable automatic generation of new knowledge by such
devices in addition to knowledge generated by people in conventional ways.
134 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Public knowledge can be relatively Figure 4-13. Examples of Completeness and

detailed when dealing with factual Accessibility of Knowledge.
knowledge. Yet, it is typically more Knowledge
Accessibility
general and abstract and less detailed
than the other knowledge forms. Thus, it
High Public
often requires extensive personal Knowledge
interpretation and much detailed expert
or personal knowledge and practical
Medium Shared
experience before it can be used in real Expertise
work. Public knowledge in professional
and business areas is frequently highly
Private
organized and codified, and its Low
Knowledge
communication may be structured and
well managed through media, learning Low Medium High
Knowledge Completeness
institutions, and other channels. Other
kinds of public knowledge may be haphazardly organized and be missing important
knowledge elements. At times, it may be both incomplete and incongruent. Public
knowledge communicated through isolated newspaper stories may fall into this category.
Established public knowledge in one domain is typically well coordinated with public
knowledge in other domains. Hence micro-economics is coordinated with social science and
monetary theory, engineering is coordinated with physics and chemistry, marketing with
management theory, and so on. Interdisciplinary research, borrowing models and approaches,
and building on knowledge from other areas ascertains that knowledge consistency remains
high throughout the public knowledge domain.
Large amounts of important public knowledge are maintained and codified by the world’s
libraries. These institutions have devised extensive categorization systems to order and
catalog the knowledge they keep. However, they are not directly concerned with the
knowledge itself, only its organization, safekeeping, and accessibility. Hence, libraries are
great resources for finding knowledge, but they do not assist directly in building knowledge
through learning, codification, or research. Nor do they participate actively in the use of
knowledge.

Shared Expertise -- Explicit Proprietary Knowledge Assets

Shared expertise consists of knowledge of all types and is more specialized and detailed
than public knowledge. It is largely explicit, consisting of exclusive knowledge that is shared
among professionals and practitioners in a field and is of great importance in business and
industry. Much of what a company considers its proprietary or leading-edge knowledge and
technology is expertise that is shared among its proficient employees.
Professionals and experts develop unique perspectives and approaches using “short-hand”
How We Organize and Hold Knowledge 135

methods to communicate about their work, about what needs to be known, how it should be
done, and how it may relate to other aspects of their work or to the world in general. Experts
typically develop stylized ways of communicating with their peers and use specialized
languages and concepts that are sometimes well established (including jargon, mathematics,
graphics, and demonstrations). For example, a practical knowledge worker may communicate
with demonstrations and direct reference to artifacts instead of using verbal or specialized
languages. For any field or domain, shared expertise tends to include public knowledge
associated with that field.
Shared expertise often deals with how particular work should be performed, what the
judgments are, and how the situations should be viewed (i.e., “knowledge how”). This kind
of knowledge is often structured as “know-how” in addition to hypotheses, theories, and well-
established understandings of how things work and what the consequences of actions will be
under the different circumstances. Compared to public knowledge, shared expertise is
normally codified to a much lesser degree since its explication and communication may be
informal, sporadic, and only happen when work situations demand it.
Highly proficient shared expertise may be complete and well integrated with knowledge
of adjacent fields and what else is understood by the experts. This should be expected since
shared expertise has been built over time to work and cope with the real world. On the other
hand, shared expertise can sometimes include a number of falsehoods -- myths or even
patently wrong judgments and concepts. These situations may occur when the process that is
dealt with is poorly understood. We can all think of “experts” who contradict one another
completely in areas ranging from child rearing to economics and politics. In such instances,
some of these “experts” must clearly be wrong (i.e., have an understanding of the real world
that does not correspond to reality). What is more surprising, however, is that one can find
similar inconsistencies in shared expertise among experienced operators of complex chemical
processes when the chemistry and physical operation of these processes also are poorly
understood outside their normal operating ranges.
This knowledge form also includes knowledge that is embedded in technology, work
practices, patents, and so on. Together with the shared expertise held by people, these
knowledge areas typically constitute the major knowledge assets of any organization.

Tacit Personal Knowledge Is Least Accessible and Most Complete 1

Tacit or Personal knowledge refers to knowledge of all kinds that exists in a person’s
mind and is difficult or impossible to share with others. Much of it is deeply automated,
internalized, and embedded in our nonconscious and is used without explicit awareness and
understanding of the person who holds it.

1Personal knowledge has also been called tacit knowledge by many authors to denote the
difficulty people have in communicating this knowledge. Polanyi (1966), who originated the
use of this term, discusses tacit knowledge extensively in his book The Tacit Dimension.
136 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Personal knowledge exists in full detail -- it is the essence of knowledge. It often is

impossible to share with others since it consists of complex concepts that constitute personal
perceptions of experiences and ways to “see” situations and the subject matter in general.
Frequently, no language or other communication can describe what is understood, partly
because the personal knowledge is qualitative and implicit in nature, partly because it is so
rich and detailed that it cannot be communicated with all details and relations that we
understand, and partly because it is so internalized that we have lost conscious access to it. It
has been established that most of what we know cannot be recalled directly from long-term
memory. Some of it can only be recalled when we are primed (i.e., receive cues from the
context of the situation we are in).
Personal knowledge often deals with understanding what exists, how things relate, and
how things work (i.e., “knowledge of” and “knowledge why”). It often includes a great deal
of public knowledge and shared expertise for persons particularly knowledgeable in the field.
Persons with limited proficiency in a field can include misconceptions and ill-understood or
poorly integrated knowledge aspects. An example in point is the area of “naive physics,”
which indicates that most people have grave misconceptions for such notions as the trajectory
of a ball that has been thrown horizontally.1
We have personal knowledge of everything we do, routinely or only occasionally. We
form personal knowledge about concepts, subjects, and phenomena that we observe and think
or reason about. Building knowledge in this way is one form of learning as discussed later.
Even when people retain all they learn, such knowledge is not necessarily easily accessible,
and may not be retained in full detail since we abstract and encode our knowledge in efficient
knowledge representations within our minds.
Whenever we document our knowledge, we “self-elicit” some portion of it, analyze it, and
synthesize it into reconstructed forms that constitute an explicit knowledge model at some
level of detail. This same process takes place whether we write a procedures manual, a
scientific paper, or a set of directions for how to drive home from a nearby town. It also takes
place when we explain what we know in a particular knowledge area. In the latter case, it is
far easier to explain the parts of the knowledge that have not been compiled and automated
than that which is deeply entrenched and has become automatic.

FOUR TYPES OF KNOWLEDGE

In addition to the forms of knowledge, we need to distinguish between the types of

knowledge contents. We distinguish between four types of knowledge that cover all relevant
1 Most people (from both emerging and industrialized nations) believe that the ball will fly
straight out for some distance and then fall more or less straight down instead of following a
gradually steeper and steeper trajectory that is approximately parabolic, which is the way it
happens and the way, therefore, it should be represented in correct thinking. There are many
other examples of misconceptions which result from incorrect (wrong) mental models that
people have developed by generalizing on their own without guidance.
 How We Organize and Hold Knowledge 137

knowledge contents that we are interested in for practical purposes. Arranged according to
increasing abstraction, aggregation and complexity these are: Factual, Conceptual,
Expectational, and Methodological knowledge.
Examples of the kinds of knowledge that can be represented are shown in Table 4-3. The
top example in each cell is from the domain of rotary compressor diagnosis. The middle
example is from a refinery operator expert, while the last example is from the world of a
crude oil trader. The examples of facts, concepts, judgments, and reasoning strategies are
shown as concrete manifestations of more abstract generalizations such as “Real-Time
Multiple Hypothesis Reasoning,” and so on.

Table 4-3. Examples of Representative Types of Knowledge.

FACTUAL CONCEPTUAL EXPECTATIONAL METHODOLOGICAL
Knowledge Knowledge Knowledge Knowledge
Facts, Data, Perspectives, Judgements, Reasoning
Known Concepts, Hypotheses, Strategies,
Causal Chains Gestalts Expectations Methodologies

• Measurements of • "Mechanical condition" • "The compressor will wear • "Look first for lubrication
system problems"
bearing temperature & • "Lube system operation is fast if operated with low oil
Public Knowledge

oil pressure OK" supply" ---

--- --- --- • "Look for temperatures,
pressures and flows
• Catalyst Temperature • "Overall reactor stability" • "When reactor is warmer outside normal operating
• Heat Balance Calculations • Reaction Severity than normal, product quality is
•Reaction Kinetic Models better, but catalyst life will be limits"
---
--- shorter and maintenance will • "Determine bid price from
•Terms of quotes offered --- be higher"
•Terms of bids from buyers • The concept of: --- supply/demand balance and
historic price elasticity"
• Overall mathematical "Good balance between many • "When supply exceeds
Sypply/Demand demands and many supply demand, prices will drop"
balance model flows"

• Location of bearing hot • "Generally worn down" • "A little water in the oil is • "Check for past
spots • The discrete states of not harmful" lubricating system
Shared Expertise

• Degree of oil foaming "overall condition of • "Water in the oil makes it failures"
--- compressor" foam"
• Heat balance history --- --- ---
over the last hour • Even distribution of • "When reactor is bumpy, • "Check if inlet baffles are
--- reaction across catalyst the feed may contain slugs of damaged and cause
• Demand forecasts bed contaminants" channeling in catalyst"
• Supply forecasts --- --- ---
• Supply elasticities • "Market is 'hot' today" • "When there are big buyers • "Look at how the market
in the market, they will ignore makers operate and run
• Market is about to 'loosen small sellers unless there is with them"
up'" a shortage"

• "Spotty bearing wear" as • "Compressor must have • "I first look at the
Personal Knowledge

• Oil grittiness a state of "particular wear been operated with dirty oil in operating history to spot
(when kneading oil in palm conditions" the past" mismanagement"
of hand) --- --- ---
--- • "The reactor is bumpy • "When the reactor changes • "What has last week's
• The different kinds of today" between being 'bumpy' and operating history been?
product colors --- hot, but is stable, there may Have there been any
• The different sounds of • "The supply/demand be uneven reaction across 'sporadic' abnormalities?"
reactors and pipes balance is uneven today" bed" ---
--- --- • "Look around to see
• "Paul always sounds • "I have a hunch that when where there are any
anxious when he is under Paul is anxious he makes market inefficiencies"
pressure to sell" bad judgments"
138 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Factual Knowledge -- Concrete and Reality-Connected Details

Facts, Confirmed Data, Known Causal Chains, and Remembered Sensory Inputs and
Episodes (including mathematical and procedural models) is our knowledge of what we
“know to be true.” Much of this knowledge is retrieved from memory in the form of
declarations. It is semantic knowledge which pertains to particular knowledge domains and is
organized to be relevant to particular contexts. When we elicit and codify knowledge in
external knowledge bases, most of the initial knowledge is of this type.

Conceptual Knowledge -- Our Abstract Models of the World

Concepts, Perspectives, Gestalts, are meta-models for complex situations built from
observations and available facts and data. This knowledge includes conceptual images about
such things as how to view the economic situation, how to think about behavior and operating
status of difficult chemical plants (such as when the operator says: "It is unstable today"),
what frame of reference applies to a particular competitive situation, and so forth.

Expectational Knowledge -- Our Accumulated Experiences and Associations

Expectations, Judgments, Working Hypotheses, Associations, and Beliefs are derived

mental objects and connections that lead us to opine how situations -- simple and complex --
might evolve and, in some cases, how to handle them. Expectations are partly based on
working hypotheses for how the situations work and what influences them. They also include
our associations that often become premises and reasoning stepping stones for potential
conclusions and interpretations of contexts. Beliefs are formed by expectations and working
hypotheses and based on concepts, perspectives, and facts and confirmed data.

Methodological Knowledge -- What Do I Do Now?

Methodological Approaches and Reasoning Strategies provide the meta-knowledge for

how to think and reason within a particular context about particular situations, given the
information about the situations and the background knowledge in terms of facts, data,
perspectives, and judgments.
As part of the four types of knowledge we described above, we also must include feelings
that have been registered and goals and objectives associated with the knowledge involved.
Goals and objectives are often expressed as part of the expectations that we form based on the
knowledge we hold on the first conceptual knowledge level. Feelings are directly associated
with the degree to which goals and objectives can be expected to be fulfilled in particular
future situations or right now. Happiness, for example, may be the feeling that are associated
with the fulfillment of goals associated with personal satisfaction.
How We Organize and Hold Knowledge 139

A LITTLE KNOWLEDGE CAN BE DANGEROUS!

When we provide people with selected factual knowledge without giving them any
corresponding conceptual knowledge, we invite trouble. People have strong tendencies to
generalize to build abstract mental models of any factual situation they encounter. By
providing selected factual knowledge -- which is similar to “learning a little knowledge” -- the
recipients will construct a mental model of the underlying structure, and similar to the five-
year olds who create erroneous concepts of what they observe, the adult recipients’ models
will also typically be wrong.1 When we teach only factual knowledge to individuals -- what
we often think of as well targeted and only what is required -- we invariably invite them to
draw their own conclusions with all their misconceptions and problems.

Different Manifestations of Knowledge

From the perspectives of an organization, knowledge manifests itself in many forms
beyond human knowledge. As illustrated in Figure 1-2, knowledge underlies the whole
organization. Always originating with people, it flows into all other aspects of the
organization ranging from its structure, culture, work practices, and technology, to its
products and services.
The success of the organization relies directly on the quality of people and its other
aspects, and that quality is a direct function of the knowledge that has been cumulated and
embedded in them. The cumulation of knowledge and its accessibility must be managed
carefully and, therefore, is a major function of the knowledge-conscious organization. Some
of the different manifestations of knowledge within an organization are included in Table 4-4.
Clearly, one of the major responsibilities for management is to create the highest quality
products and services and the most effective organization and infrastructure possible. This
has always been recognized. What has not been recognized, however, is the need to consider
explicitly the types and quality of knowledge that must form the basis of each aspect of the
organization. The approach to making this knowledge available for proper use must also be
considered.
We can illustrate more detailed examples of different manifestations of knowledge by
providing specific descriptions of some of the kinds of knowledge that can be associated with
different categories of manifestations. Some of these include the following:

1Howard Gardner (1991) discusses how children aged of five to ten build most of the mental
models they will have for the rest of their lives of the physical and social world. He points
out that most of these models are full of misconceptions and errors -- that stay with them
during their life-time.
140 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Table 4-4. Examples of Different Manifestations of Knowledge.

Tacit Knowledge
• In skills and habits • In simple classical conditioning
• In priming • In nonassociative learning
Explicit Knowledge
• In a person’s mind: • In books and written materials:
- in facts - in production knowledge
- in events - in functional and systematic knowledge
- in procedural knowledge - in images
Implicit Knowledge
• In historic records of past decisions • In R&D reports
Combined Explicit and Implicit Knowledge
• In “Lessons-Learned” reports
Procedural Knowledge
• In computer programs
Anecdotal Knowledge
• Memory of a particular “case” in a person’s mind
Embedded Knowledge
• In products and services • In technology
• In organizational structures • In patents and inventions
• In systems and procedures • In cultural traditions

• Knowledge embedded in technology:

-- Knowledge of how to achieve desired heat dissipation and avoid electromagnetic
interference incorporated in the design of micro-miniaturized electronic components.
• Knowledge associated with use of technology:
-- Knowledge to exploit, operate, and maintain supermarket checkout scanners.
• Knowledge embedded in systems and procedures:
-- Documentation and analysis requirements and approval procedures for capital
projects, the embedded knowledge pertains primarily to what the systems do and what
the procedures are. It also pertains to acceptable management procedures, how to use
systems and procedures to counterbalance weaknesses and exploit strengths in
organization and people, how to respond to competitive situation, etc.

THREE KINDS OF EMBEDDED KNOWLEDGE

Whenever knowledge work is performed, knowledge is transferred, that is, it flows from
people to their work products and becomes embedded in the work products. Looking closer
at this process, we see the need to consider different kinds of embedding, depending on how
the embedded knowledge is manifested.
How We Organize and Hold Knowledge 141

Embedding knowledge for end-user consumption. When a knowledge worker, say an

expert car mechanic, diagnoses a difficult transmission problem and repairs the car, his
knowledge is clearly embedded in the final work product, but his knowledge is not available
for reuse or to be built upon, that is, for other people to learn from to improve future
situations. The knowledge has been embedded for end-user consumption and, as such, has
great economic and quality-of-life value to the end user. It may be ephemeral as far as the
repair shop is concerned.
Implicit, leverageable knowledge is found when knowledgeable people develop
embedded technology for reuse in products and as foundations for new developments. When
an engineer designs a new piece of equipment that builds upon previous designs and itself
becomes the forerunner for more advanced designs, the engineer embeds his or her
knowledge implicitly into the design. Similarly, anyone who develops a new product or
service embeds implicit knowledge into their creations.
Other examples of this kind of embedded knowledge is evident in organizational
structures where the knowledge of how to do business was part of the basis for deciding who
should work with whom, who should report to whom, and so on. Systems and procedures
also incorporate extensive knowledge which typically is implicit.

Figure 4-14. Hierarchy of Explicit and Tacit, and Active and Passive Knowledge.

Knowledge

Explicit Tacit
Conscious or Codified Nonconscious - Not
Directly Accessible Directly Accessible

Embedded
Encoded
Passive Active Not Accessible
Passive Active
as in: as in: as in: as in:
• Library • KBSs • Episodic • Procedural
books • Experts Memory Memory
• Procedures • Isolated • Automated
Manuals Facts Routines

Passive Active
as in: as in:
• Technology • Information
• Products Systems
• Services
142 Knowledge Management Foundations:
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Explicit, leverageable knowledge is found when we incorporate active knowledge into

tools to support knowledge workers. Such tools may be computerized decision support
systems (DSS), knowledge-based expert systems, or just plain written directions for how to
approach a problem or perform a task.
A different perspective of knowledge manifestations is shown in Figure 4-14 which
outlines a hierarchy of knowledge in terms of its explicitness and active/passiveness.
In this figure, we indicate a number of examples of different manifestations of knowledge.
The knowledge can be manifested in people and explicit knowledge repositories or can be
embedded in inanimate forms where it can be both passive or active.
 What Knowledge IS

Chapter 5
Approaches to Characterizing Knowledge

This Chapter
Effective and efficient KM requires good, easy-to-use approaches to describe and
represent knowledge. This chapter introduces a set of approaches that have been found useful
for managers and knowledge workers in explicating the important aspects of knowledge. The
approaches that we introduce are:
• Proficiency Levels
• Knowledge Profiles (represented as polar plots)
• Descriptions -- Conceptual Knowledge Level Dimension
• Descriptions -- Knowledge Detail Dimension
• Declarative Knowledge -- Greatest Detail
• Descriptions of Schemas, Scripts, Episodes, Events, and Routines
• Task Environment Analysis and Modeling (TEA) and Knowledge Use and Requirements
Analysis (KURA)
• Other Ways to Characterize Knowledge
-- Knowledge Flow Models
-- Concept Hierarchies and Relatedness Networks
-- Knowledge Form and Type Matrix Representation
-- Stories and Natural Language Models
-- Codified Knowledge Models
The chapter opens by highlighting some general perspectives on describing and
representing knowledge followed by a presentation of measurement issues relevant to
managing knowledge. The chapter then introduces different approaches using selected
examples.
The objective of this chapter is to provide sufficient insight into practical approaches to
describing and representing knowledge to allow the manager and knowledge worker to work
explicitly with knowledge at aggregated levels to provide both overviews and specifics for
themselves and when communicating with others. It is particularly important to be specific
144 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

with regard to knowledge availability, requirements, shortcomings and, in the case of

knowledge flows, their precise nature and content.

General Perspectives
When we manage knowledge, we must have ways to describe or represent it. This
requirement takes us into several different realms. For example, we may be concerned with
describing both detailed and abstracted knowledge in people. We also need to describe and
represent knowledge that has originated with people but now is part of documents,
technology, or computer systems.
Earlier, we explored short- and long-term memories and showed that much of the
knowledge we hold in memory is in the form of complex concepts and images. Other
knowledge is held in forms that allow us to explain it in short sentences or clauses. How we
actually store knowledge in our minds is unknown. However, it appears that we do not
remember every detail explicitly, but that we extract and remember salient features and
aspects of these memory objects. By encoding complex and comprehensive situations and
concepts that way, we are able to make them manageable, thereby being quite effective in our
reasoning or in otherwise dealing with them.
Knowledge that is external to people is either implicit or explicit. When it is explicit, it is
already described in some detail, but its description may be too detailed and require
abstraction for management purposes. It may also require reorientation to another perspective
such as when investment knowledge is found in a manual for financial planners and needs to
be changed in order to be useful to “slightly sophisticated” investors. On the other hand,
implicit knowledge, as found in established technology, may require considerable analysis
and organization before it can be suitably represented and described.
Below, we introduce approaches to characterizing and describing knowledge at various
levels of detail. Some approaches are graphic and use diagrammatic representations, others
are more or less formal or structured natural language descriptions, while a few are formalized
knowledge representations used to describe knowledge in great detail when we wish to
automate it and reason with it in knowledge-based systems.
When we codify knowledge within a general area or in a smaller unit such as a knowledge
segment (or a particular case), we create abstract knowledge models that describe what the
knowledge consists of and how it is organized. The knowledge models, abstractions of the
actual knowledge, describe characteristics of the knowledge as seen from a particular
perspective that we need to emphasize for the intended use. For example, we can model a
commercial loan evaluation expert’s knowledge in several different ways. We may create a
relatively detailed model to make the expert’s knowledge available to other loan evaluators.
In this case, we need to describe the expert’s knowledge from the perspective of what she
knows and how that differs from what others know, how that knowledge is used, and what its
Approaches to Characterizing Knowledge 145

nature is so it might be shared with the less experienced practitioners in a useful manner. We
may also make a higher level general model to describe which expertise areas the expert
covers and her proficiency within each. Such a model may be used to decide which areas she
will be most qualified to help others with, which areas she may wish to develop further, and
the areas in which she should be the ultimate decision maker in.

Issues of Knowledge Measurement

As discussed in Chapter 3, knowledge is complex and ill defined. We actually know very
little about knowledge and how to describe it to reflect all its details and nuances. When we
describe what we know about knowledge, we must use simple theoretical models that are
highly idealized and based on many hypotheses. In most cases, these models lack precision.
We frequently have problems finding out and describing what people know and how they use
their knowledge when performing intellectual tasks as part of their work. In spite of these
problems, we need manageable and useful methods for categorizing knowledge both within
and outside people. In particular, we need to characterize and describe the knowledge we use
to create services and products and to operate organizations. The intent of this chapter is to
provide a beginning insight into useful approaches to categorizing knowledge for these
purposes.
When we characterize knowledge, we typically start with broad overviews and imprecise
descriptions of the knowledge domain, but as we obtain better insights, we describe
knowledge with increasing precision and detail. That is, we identify and classify the
knowledge units, their nature, and the relations between them in greater detail until we have a
knowledge description or model that achieves our purpose. Typically, these descriptions are
expressed in common language. However, we may at times be able to use mathematical
models and other formalized representations. When we gather, analyze, and describe the
knowledge in this way, we codify it by giving it structure and organization -- on paper or in
other forms. Our ability to codify knowledge, in part, depends on our ability to characterize
it.
The same knowledge and expertise can be categorized in different ways and from many
perspectives. To manage knowledge we are mainly concerned with the perspectives on what
it is (i.e., what the facts, concepts, judgments, and reasoning approaches are and which areas
they cover), where it is, and how it is used to perform tasks to conduct business. For different
KM purposes, it is necessary to characterize and describe knowledge at several levels of detail
and with precision ranging from very detailed to summary overviews. In all cases, we would
like to use effective methods to provide commonly accepted and well understood descriptions
of the knowledge involved and to give insightful representations of the situations that need to
be managed. Further, we would like the methods to be cost-effective and to allow us to obtain
the desired insights only to the depth the situations warrant.
146 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

We might prefer to start with introductory surveys to obtain general overviews of

knowledge available in the various business functions under analysis. The approaches that we
use should give indications of the way knowledge is used and its value to the organization.
As additional studies are made of the knowledge and its application, the knowledge is
characterized with greater detail and precision until, after elaborate investigation, the
description in effect is the knowledge itself. At that point, the knowledge has been codified in
all its detail and all that is known has been codified. It has been made explicit.
For purposes of automating knowledge in knowledge-based systems and similarly
demanding objectives, we need to characterize and describe knowledge in great detail,
perhaps using formal knowledge representations such as “if-then” rules. Treatment of these
representations and categorizations are, beyond the scope of this book, however.1

Proficiency Levels and Expertise

When considering people’s expertise that people have in a knowledge area, we need ways
to express what they know. Similarly, if a task needs to be performed, we need to identify
and describe the level of knowledge required to perform quality work. In many situations, we
need to categorize and express the levels of knowledge in a general way within a specific
knowledge area without going into great detail.
An important, high-level knowledge categorization measure, is the level of proficiency in
a particular knowledge area such as a section or segment. We use this measure in several
ways. For example, we can use it to:
• Express how proficient a person, or a group of people, is in an area
• Specify the proficiency required to perform quality work in a task
• Describe the extent and depth of knowledge in a knowledge base
• Characterize the level of performance of a knowledge-based system
• Identify and illustrate knowledge gaps in a business function
• Show unused expertise that may provide new opportunities
We introduced the knowledge proficiency dimension in Table 3-1-D and provided seven
proficiency levels ranging from beginner to grandmaster. We have intentionally chosen labels
that correspond to meanings in general use to make them intuitively understandable and
widely useful. The levels and their labels are explained in Table 5-1.
In practice, we may never find people who are grandmasters. However, we frequently
find experts, and most larger organizations have many masters, although the majority of them

1Those interested in formal representations of detailed knowledge are referred to works such
as Brachman & Levesque (1985) Readings in Knowledge Representations, Shapiro (1987)
Encyclopedia of Artificial Intelligence, and McGraw & Harbison-Briggs (1989) Knowledge
Acquisition.
Approaches to Characterizing Knowledge 147

can only claim mastery in narrow knowledge areas. The scale indicated in Table 5-1 may not
always be appropriate.1 Different situations and organizational environments may require
different ways of defining proficiency levels. Several proficiency or expertise level
categorizations have been proposed. On some occasions we have used systems consisting of
five proficiency levels; however, later field experiences have indicated that the seven-level
scale discriminates better and allows us to distinguish between knowledge requirements and
performance levels of different individuals in a department or work function.

Table 5-1. Seven Levels of Proficiency.

I Ignorant. Totally Unaware. Does not know of the existence of the area.
B Beginner. Vaguely aware, innocent with little and arbitrary understanding. Lacks
experience and competence (“amateurish”.)
A Advanced Beginner. Aware, informed but relatively incompetent in broad areas.
Cannot work alone but begins to develop skills in narrow areas (“novice”.)
C Competent Performer. Beginning to develop an understanding while being narrowly
skilled. Trusted to perform certain tasks alone. Learning by practical experience
under skilled supervision (“apprentice”.)
P Proficient Performer. Competent and broadly skilled with a few areas of deeper
knowledge. A team leader. A worker who has learned a trade and works for another
person. An experienced and reliable worker or performer, especially as
distinguished from one who is brilliant or colorful (“journeyman”.)
E Expert. Highly proficient in a particular area and generally knowledgeable. Provides
leadership and crucial expert insights. One with the special skill or knowledge
representing mastery of a particular subject.
M Master. Highly expert in many areas and broadly knowledgeable. Is normally the
principal and leading force in the knowledge area both within and outside the
organization. A revered leader, a qualified teacher of both proficient performers and
experts, a performer of consummate skill.
G Grandmaster. World-class expert who is both knowledgeable and wise in all areas of
the domain and enjoys wide recognition. Very few exist.

1 Several proficiency categorization systems are used. Dreyfus & Dreyfus (1986) in Mind
over Machine propose five states: 1. Novice; 2. Advanced Beginner; 3. Competence; 4.
Proficiency; and 5. Expertise. Bohn & Jaikumar (1986) propose eight stages of knowledge
about technical processes: 1. Recognition of prototypes; 2. Recognition of attributes within
prototypes; 3. Discrimination among attributes; 4. Measurement of attributes; 5. Local control
of attributes; 6. Recognition and discrimination of contingencies in control; 7. Control of
contingencies; and 8. Complete procedural knowledge of control of contingencies. Lange
(1993) in his work with human resource management uses five levels: 1. Innocence; 2.
Awareness; 3. Understanding; 4. Competence; and 5. Excellence. For general purposes, we
find it desirable to operate with the seven levels listed in Table 5-1 to appropriately separate
proficiencies in people who work on real-life tasks. We also use a five-level “BACPE” scale
consisting of: 1. Beginner; 2. Advanced Beginner; 3. Competent Performer; 4. Proficient
Performer; and 5. Expert. We omit the two last categories (Master and Grandmaster) when
they do not apply.
148 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

When we describe proficiency in broad knowledge domains, we must divide it into

smaller areas, such as knowledge regions, sections, or even segments that are adjacent to each
other to the largest extent possible, to provide greater specificity and clearer categorization of
the knowledge. In Table 5-2 we show two examples of how this is done in practice. One
example is from the process industry where the domain has been divided into eight
knowledge areas, the other from the financial service industry with ten knowledge areas.

Table 5-2. Dividing Knowledge Domains into Smaller Knowledge Areas.

Process Operations Expertise Area Portfolio Management Expertise
Operating the Unit Process 1 Trading Strategy
Operating Procedures 2 Investment Strategy
Plant Equipment and Layout 3 Portfolio Theory
Diagnostic Methods 4 Portfolio Selection
Process Chemistry 5 Securities Selection
Quality and Customer Requirements 6 Intelligence Analysis
Company Policy and Management 7 Economic Forecasting
Process and Company Economics 8 Technical Analysis
9 Company Analysis
10 Industry and Competitive Analysis
These examples represent expert opinions of professionals from the two organizations on
how they specify knowledge areas in these expertise domains and divide them into roughly
equal knowledge areas. The knowledge areas are not listed in any order of priority but they
represent areas of roughly equal importance and extent. Further, they are listed in such an
order that adjacent professional areas will be shown next to each other when presented in a
polar diagram as discussed below. Practitioners find that it is not easy to identify and label
the different expertise categories that should be considered. There are two reasons for this:
(a) it may require unusual broad overview to establish all knowledge areas that are relevant to
a particular work function, and (b) it is difficult to cluster the smaller knowledge areas into
larger groupings that to the largest extent possible are independent and of equal importance.

Knowledge Profiles
A very useful representation of high-level knowledge is the knowledge profile. We can
plot the proficiency levels for a knowledge domain in a polar diagram where the individual
axes represent separate knowledge areas such as those in Table 5-2.1 In this way, we obtain a

1 Polar diagram plots allow reliable and quick recognition of strengths and weaknesses. As a result,
they provide a superior overview representation compared with tables or vertical and horizontal bar
charts. Our visual system discriminates the angular positions of polar representation much better than
the relative position in a linear progression of bars.
Approaches to Characterizing Knowledge 149

highly representative description of what a person knows or what kind of expertise is required
to do a task right. Figure 5-1 provides an example of knowledge profiles for two typical
chemical plant professionals, one is an expert operator while the other is a process engineer.
In this example, the two persons’ knowledge profiles are shown for the knowledge
segments that were listed in Table 5-2 as required for process operations expertise. We often
show the proficiencies of people with different backgrounds and areas of expertise in the
same graph when they collaborate on, or have different responsibilities for, a particular task.

Figure 5-1. Examples of Knowledge Profiles from the Process Industry.

Expertise in
Operating the
Unit Process
G

M
Expertise in Expertise in
Operating Plant Equipment
E
Procedures and Layout
P

B Expertise in
Expertise in
Process Diagnostic
I Methods
Chemistry G M E P C A B B A C P E M G

Expertise in P Expertise in
Quality and Process and
Customer E Company
Requirements Economics
M
Expertise in
Company Policy G
Expert Plant Operator
and Management Process Engineer

The plant operator has expert proficiency in the areas of operating procedures, operating
the process, and plant equipment and layout. She is less of an expert in the other areas and
does not know process chemistry real well (she is somewhere between an advanced beginner
and a competent performer in that area). The process engineer knows the plant less well than
the operator, but has considerable expertise in process chemistry, quality and customer
requirements, and diagnostic methods. Neither of the two has extensive knowledge of
company policy and management practices or process and company economics, although the
150 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

engineer knows more in those areas than the operator. The knowledge profiles of the two
process company employees indicate that their knowledge is sufficient for performing their
designated tasks. However, they may not know enough to transfer their knowledge to other
tasks beyond their present responsibilities.
The knowledge profile in Figure 5-1 provides a good overview of what a person knows.
This type of profile is also used to portray the knowledge required to perform a quality job for
a particular position and to indicate areas of shortfalls or unused knowledge. An example of
these uses is shown in Figure 5-2 for the portfolio manager position in Table 5-2.

Figure 5-2. Knowledge Profile Used to Describe Expertise Requirements for a Portfolio
Manager In an Investment Firm.
Proficiency in
Trading
Strategy
G
Proficiency in Proficiency in
Industry & M Investment
Competitive Strategy
Analysis E

C
Proficiency in Proficiency in
A
Company Portfolio in
Proficiency
Analysis Theory
B

I
G M E P C A B B A C P E M G

Proficiency in A Proficiency in
Technical Portfolio
Analysis C Selection

E
Proficiency in Proficiency in
Economic M Securities
Forecasting Selection
Proficiency in
G
Intelligence
Analysis

The job proficiency requirements for the position are indicated with a dotted line for the
ten areas of expertise, while the actual proficiency for a particular portfolio manager is shown
with a solid line. The person shown here demonstrates many strong points relative to the job
requirements. She is an old-timer in the organization who previously was a trader. Before
that she was an analyst but she is relatively new as a portfolio manager. While she is an
Approaches to Characterizing Knowledge 151

expert in areas related to her previous jobs, she is not yet very good at most of the portfolio-
management tasks. As a result, she performs some jobs excellently, but makes errors in other
cases and, therefore, still needs significant assistance.
There was room for assisting this portfolio manager with additional knowledge. This
assistance comes in the form of pooling expertise from experts in the five areas in which she
is deficient. It also comes from an easy-to-use rule book. Under other circumstances, the
assistance could come from a knowledge-based system (expert system or other computer-
based workaids), which the manager could consult on issues about which she has questions.
If such a knowledge-based system were an active reasoning system, it could automatically
review the decisions she makes, suggest alternatives, and point to issues that may be relevant.
This is not a utopian dream. At present, most large financial companies have systems of this
kind in full operation as part of their decision support system work stations. Most of these
systems are implemented as rule-based “expert systems” or case-based reasoning systems.
Sometimes we need to analyze and portray what a person knows in greater detail than can
be supported with the simple diagram in the preceding figures. We can expand each
knowledge area to portray a number of additional knowledge axes. Each major knowledge
area is expanded into six to twelve sub-areas, each of which can be analyzed and estimated to
illustrate job requirements, a person’s proficiency profile, available expertise in a team, or
other knowledge-level assessments of interest.

Descriptions of Knowledge at Different Levels of Detail

Whenever we describe or specify knowledge, we do so at a particular level of detail.
Similarly, we often refer to knowledge areas and use examples that also are given at some
particular level of detail. In Chapter 3 we introduced five different dimensions of knowledge
and described the concept of Knowledge Detail dimension in Table 3.1. From aggregated to
highly detailed these dimensions were:
1. Knowledge DOMAIN
2. Knowledge REGION
3. Knowledge SECTION
4. Knowledge SEGMENT and REFERENCE CASES
5. Knowledge ELEMENT
6. Knowledge FRAGMENT
7. Knowledge ATOM
We use different levels of detail for many different purposes. When we wish to identify
what generally needs to be known by a professional, we may only need to refer to the
knowledge regions that need to be commanded. When we decide on the curriculum that we
need to teach to the same professional, we will need to be more detailed, down to the section
level, perhaps. And when we actually teach the subject matter we need to cover
152 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

representative reference cases and knowledge elements with some fragments and atoms as
well. The relationship between the different categories in the knowledge detail level
hierarchy is illustrated in Figure 5-3. This figure also provides some examples of the different
descriptions that may be used to indicate particular levels of knowledge characterizations.

Figure 5-3. Illustration of the Knowledge Detail Level Hierarchy.

Business Knowledge
Management Domain

Financial Marketing Personnel Knowledge

Management Management Region

New Product Customer Sales Pricing Knowledge

Planning Service Support Section

Redesign Handle a Customer Obtain Expert Knowledge

Work with Advice from Segment &
Practices Product Problems R&D Reference
Case

First Call up Conduct Dialog by Write Report with Knowledge

Customer History First Asking What One Paragraph Element
& Application Area the Problem Is Summary Followed by
Discuss..

Check if Problem If Problem Is that If Problem Is that Knowledge

Falls into Known Adhesive Bleeds Adhesive Loses Fragment
Category Through ... Strength

Bleeding Can Bleeding Is Caused Bleeding Is

Knowledge
Follow Three by Partly Dissolved Caused by Porous Atom
Different Paths Material Material
Approaches to Characterizing Knowledge 153

EXAMPLE DESCRIPTIONS

What the Knowledge Is about

Knowledge Domain. When we work with general knowledge areas, we often use
descriptions that capture a whole domain such as business management or electrical
engineering. Normally, we expect that broad professionals will be proficient in many
domains beyond their narrow specialty. Some of the domains in which we expect proficiency
include “Knowledge of the World” (which includes the domains of geography, history, social
knowledge, etc.) and knowledge of effective interpersonal relations. Hence, it may be too
broad to use domain labels such as management, medicine, engineering, and so on. Examples
of Knowledge Domains include:
• Internal Medicine
• Mechanical Engineering
• Business Management
• Finance
Knowledge Region. When we become more specific and need to focus on a particular
area within a domain, we deal with the detail of a Knowledge Region. We use this level of
specificity to designate general areas of specialties that in a university might be covered by a
group of courses. Examples include:
• Competitive Analysis Methods and Considerations
• Chemical Reactor Engineering and Design
• Urology
• Automotive Mechanical Design and Engineering
• Product Marketing
Knowledge Section. When we wish still greater specificity to be able to focus on a
person’s specific area of specialization or particular area of expertise, we go down to the level
of the Knowledge Section. Examples include:
• Product Pricing Strategy Setting
• Personnel Evaluations
• Kidney Diseases
• Transmission Design
• New Product Planning
Knowledge Segment and Reference Cases. When we identify the particular or unique
expertise that an individual possess or that may be required to perform specific tasks we need
to describe the knowledge on the segment level. Examples include:
• Product Marketability Evaluations
154 Knowledge Management Foundations:
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• Personnel Performance Reviews

• Diagnosis of Kidney Diseases
• Gear Train Specification and Design
• Product Marketability Evaluations
• Diagnosing Mrs. Smith’s kidney stone
Another type of a Knowledge Segment is the Reference Case. Two abbreviated examples
are:
1. The competitive situation last year when Dolva Corp brought out their new and
sophisticated toaster design months ahead of schedule and at a very competitive price
caught us unaware. However, we were able to respond successfully by immediately
offering our new but unfinished design to buyers for the large chains at lower cost and
with extensive guarantees on delivery and performance.
2. Title: Secured Loan Applicant with High Income and Large Unsecured Debt.
Description: A loan applicant applies for a secured loan in the $5,000 to $20,000 range
and has sufficient discretionary income to service payments. However, applicant has
unsecured debt that exceeds our guidelines.
Recommendations:
i. If applicant also has low net worth, deny application
ii. If applicant has net worth over $50,000 but less than $200,000 and unsecured debt is
less than 50% of income after tax, forward application for management decision
iii. ...
Reference cases can be relatively complete case histories describing the initial situation
(to allow identification of similar patterns in a new, comparable situation) and the way the
situation was handled, usually with an indication of how successful the outcome was. They
can be in free-form language or structured to correspond to automatic reasoning tool
requirements. To achieve additional levels of specificity, cases may also be described with
greater detail down to the element or fragment level.

Characterizations of the Knowledge Itself

Knowledge Elements, Fragments, and Atoms do not describe the knowledge implicitly.
We use these levels of detail to describe -- or represent explicitly -- the knowledge itself in
many different forms. We may use words, diagrams, images, equations, or procedures (often
as executable procedures or “methods” as in computer programs or in the coefficients in
neural nets). In some cases, the explicit knowledge is not accessible to direct interpretation.
This may particularly be the case with procedures and neural nets.
Knowledge Elements typically consist of particulars of strategies, procedures, concepts,
or cause-and-effect chains. At times, knowledge elements may be expressed as semantic nets
or concept hierarchies. Examples include:
• Diagnostic strategies such as: “When considering which disease is present, first collect all
Approaches to Characterizing Knowledge 155

symptoms, then try to explain as many of them as possible with one disease candidate”
• Gear Train Contact Force and Energy Loss Calculations
• Customer Acceptance Estimations
Knowledge Fragments consist of aggregated assemblies of specific knowledge objects.
The fragments typically include interlinked entities and normally also point to other entities as
required. Examples include:
• “If the symptom is excruciating pain, then consider kidney stone”
• “When there are too many gears in the transmission, the energy loss is excessive“
• “When there are many comparable and competitive products already in the marketplace, a
new product must have very special and attractive features to be highly competitive”
Knowledge Atoms consist of individual knowledge objects that may be as simple as a
single fact. As with the other knowledge objects, knowledge atoms may be concrete or may
be highly abstract as when denoting a single concept and its direct relation to another entity.
Examples include:
• “Product quality is a positive competitive factor”
• “One symptom is excruciating pain”
• “Use case hardening of gear surfaces in pressure range 4”
• “Price is a negative competitive factor in most cases”

Conceptual Knowledge Levels Revisited

We often need to describe how people hold knowledge from the perspective of how they
may be able to use it. In Chapter 4, we introduced four different conceptual knowledge
levels:
1. Goal-Setting or Idealistic Knowledge -- Vision, Goal, and Paradigm Knowledge
-- Knowing WHY the ideal is desirable and obtainable
2. Systematic Knowledge -- System, Schema, Reference Methodology Knowledge
-- Knowing THAT it is possible, methodologies exist, and it can be achieved
3. Pragmatic Knowledge -- Decision-Making and Factual Knowledge (Know-How)
-- Knowing HOW it can be achieved (consciously)
4. Automatic Knowledge -- Routine Working Knowledge
-- Knowing HOW to achieve it (tacitly)
Different people may hold the same general knowledge at different levels. Hence, a
beginner underwriter for group health may hold knowledge on developing a proposal to a
large service organization as idealistic knowledge. The underwriter expert with whom the
beginner works may hold the same knowledge (judgments, regulatory aspects, and particulars
on contract opportunities), but as more internalized pragmatic knowledge. Finally, an
156 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

unusual underwriting master may hold this knowledge as automatic knowledge.

We use conceptual knowledge level categories to indicate how individuals hold specific
knowledge items. Later, we will see how that may affect the individual’s capabilities to learn,
innovate, make decisions, and perform regular knowledge work. It may also affect how
individuals are able to collaborate and work with others who do not hold comparable
knowledge on equal levels.

Schemas, Scripts, Episodes, Events, and Routines

In our minds, and when we work with explicit knowledge, we represent situational and
procedural concepts with varying degrees of abstraction. An example will illustrate how we
can characterize knowledge in each of these categories. Think about how we go about hiring
a new employee. In this situation the characterizations will be something like (proceeding
from the specific to the general) as follows:
Events are the numerous distinct steps that occur as the situation unfolds. Examples of
events when hiring a competent professional include:
• The approval to hire the professional is provided to the Personnel Department by the
function manager
• A resume is received
• A candidate is called to set up an interview
• A particular candidate arrives for interview
A situation may be described by many events depending on the detail in which we wish to
specify it.
Episodes are the collections of distinct steps or events that we observe as the situation
unfolds. Examples of episodes when hiring a competent professional include:
• Prepare job description and justification, discuss with manager, and obtain approval to hire
the professional
• Receive and evaluate resumes
• Call the candidate and explore availability and schedule conflicts to set up an interview
• Interview a particular candidate
A situation may consist of a large number of episodes depending on which detail we wish
to work with. Episodes may aggregate entities consisting of several events. The episode of:
“Interview a particular candidate” consists of several events like “Candidate arrives”;
“Candidate is introduced to personnel manager”; “Candidate answers questions about past
employment”; and so on.
Scripts are similar to routines in many ways. The main differences are that scripts and
their steps are general, broad, and flexible compared to the routines’ specific and unvarying
steps. Accordingly, hiring scripts may cover a range of positions, not only competent
Approaches to Characterizing Knowledge 157

professionals. Examples of a hiring script may be:

• Determine the need for additional staff (perhaps ascertain approval)
• Specify characteristics of person(s) to be hired (perhaps ascertain approval if not obtained
earlier)
• Identify where and how candidates can be identified
• Search out candidates and communicate with them by mail to obtain resumes, phone
conversations, interviews, references, and so on
• Identify individual(s) to be approached for hiring (maybe ascertain approval if not
obtained earlier)
• Contact selected candidate(s), negotiate, and secure acceptance
In the hiring script, the sequence of events may also vary considerably as indicated for
when to obtain approval.
Schemas are broader sets of tactics.1 They are quite general and rather abstract and are
particularly used for more complex situations and conditions. Examples of a hiring schema
include:
• Determine the need for additional resources -- staff, access to other departments, outside
contractors, better office automation, and so on
• Specify the nature and time frame of the resources required
• Identify sources and alternatives for resources -- candidates for hire, and so on, possibly
with evaluations of pros and cons of all kinds
• Select which alternative to pursue
• Implement the chosen alternative
Event details such as “obtain approval” may not be part of the schema. Since many
details are assumed to be part of “general operating practices,” they are part of the
background instead of serving as an explicit part of the schema itself.
As we become very familiar with the process of hiring a particular type of professional,
much of the process becomes automatic, resulting in a routine. However, we may never
routinize all steps in a script for how to handle a situation. Instead, we may routinize the way
we handle selected episodes that often are repeated.
Routine for hiring a competent professional is quite detailed and deterministic. It consists
of numerous and relatively rigid steps that might cover many of the tasks of the hiring
process. Other tasks may still require explicit reasoning. However, a simplified routine may
be described by the sequence of the main events within the following routine:
• Identify job requirement with function manager and write job standard description
• Research salary range from peer groups within organization and specify salary level and
job class
• Obtain approval for hiring from personnel department, function manager, and general
manager using standard procedures

1 Additional discussions of schemas can be found in Mandler (1979, p. 263).

158 Knowledge Management Foundations:
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• Contact the designated employment agency and authorize them to start search
• Receive resumes that have been pre-screened by agency
• Screen resumes, first in personnel department, then with function manager
• Invite selected candidates for interviews
• Interview candidates, by personnel department, function manager, and associates
• Evaluate candidates and rank them, decide what initial offers should be
• Check references for the two best candidates
• Send formal offer letter to best candidates, hold off communications to the remainders
until one candidate accepts position
• Receive response from candidate
• Negotiate salary and relocation terms, start date, and so on, with candidate, obtain
approval of renegotiated terms, write and send revised offer letter
• Candidate accepts. First verbally and then in writing
The actual routine may start earlier in the process than illustrated. It will also extend
beyond the episodes or events shown in the example and consist of hundreds of sub-events.
Routines may allow considerable room for variance to accommodate branching when
different -- but acceptable and expected -- conditions materialize.

Declarative Knowledge
As we go on to characterize knowledge itself, we find that some knowledge areas are
declarative while others are nondeclarative. Some of the more important knowledge areas are
shown in Figure 5-4. As shown, nondeclarative knowledge is held mostly by people while
declarative knowledge, although also mostly held by people and always originating with
people, can be transferred to many other forms that may be either active and passive.
Some of the precise and explicit knowledge we hold, we express as declarative knowledge
and represent as declarations. Some of these declarations are easily remembered as clear
language and can be quite detailed. What we know can be phrased in an explicit declaration
such as an if-then rule, an explicit logic statement, or a mathematical model. The level of
detail typically takes the form of knowledge fragments or atoms. A declaration of this kind
may be: “An internal rate of return of five percent above the prime rate is quite acceptable.”
Another may be: “Price is a negative competitive factor in most cases.” Other knowledge
areas are nondeclarative, and our knowledge in these areas is either implicitly expressed in
stories, examples, procedures or held tacitly in our mind as mental models or even
remembered episodes.
Approaches to Characterizing Knowledge 159

Figure 5-4. Declarative vs. Nondeclarative Knowledge Hierarchy.

Knowledge

Declarative Nondeclarative
(Explicit) (Implicit-Tacit)

Reference Skills Simple Nonasso-

Facts Events & Priming Classical ciative
Cases
Habits Knowledge Condi- Learned
tioned

Procedural Production Functional

Associative Values Visions
Knowledge Knowledge & & &
Evolutions (Rules) Systematic Knowledge
Judgments Paradigms
Methods Knowledge

Relations between several declarative knowledge items from the financial domain are
illustrated in Figure 5-5. We show several typical, yet rather isolated declarations about
investing. The declarations are phrased -- characterized -- as natural language statements.
They pertain to the same knowledge area, but to connect them to a particular situation and
draw conclusions from them, requires additional insights and mental capability. It requires
reasoning based on specific information that defines the situation, as we will discuss in
Chapter 7. Most of these declarations refer to concepts, some of which (like “acceptable
yields”) are very complex. It is relatively easy for a human with even a small amount of
knowledge to connect the different declarations. However, an automated system requires
considerably more detailed definitions for the computer program to make connections
correctly.
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Representation of Abstract Concepts

Abstract concepts have traditionally been difficult to represent and, therefore, have often
been allowed to remain undefined and intangible. However, our experience with modeling
reasoning processes for automation in knowledge-based systems (KBSs) provides approaches
that are tractable and

Figure 5-5. Explicit Declarations Examples of Investment Knowledge.

provide good
Yields above insights. The
15% ROI are The Portfolio
OK must be representation
balanced approach presented
Good
investments
Risky below stems from
investments
must have must have Yields must such work and relies
higher yields high yields
than inflation at least be on models of
5% above
prime knowledge chunking
Consider only and hierarchialization
acceptable as well as our
yields Balanced
Spread risks portfolios tendency to work
must spread
by investing
risks with discrete
in many
industries qualitative symbolic
Look at both If Prime is high, states to represent
the company investment yield
The company and the should also be concepts.
must be industry high Figure 5-6 shows
acceptable to
invest in a highly simplified
diagram of the kinds
of abstract concepts that a refinery operator has in mind when considering the stability of the
process she is responsible for running. The operator has an overall concept of what it means
to her that the process is “stable.” She also has in mind discrete symbolic “states” (that is,
discrete or bracketed state vectors) that are qualitative representations of the different
operating modes she has become accustomed to consider. She associates expectations and
judgments with these states and often communicates about them with other operators using
highly specialized language that they all share and understand. The number of symbolic
states for “stability” will normally include about a dozen “routine” states and many
“exception” states which will increase in number as the operator’s expertise increases.
Approaches to Characterizing Knowledge 161

Figure 5-6. An Example of an Abstract Concept: A Chemical Plant Operator’s Concept

of “Process Stability”.
Operator's
Expectations
Symbolic STATES
& Judgements Operator's
Plant is "nice
Heat Overall
and stable today"
Balance Concept of Plant is "slightly
Concept
Process unstable and bumpy"
Plant is "stable but
STABILITY
getting a little too hot"
Mechanical
Instrument Plant is "warming up"
Condition
Concept Condition Plant is "about to
Concept become too cool"
Chemistry Vessel Fluid
Facts & & Reaction Level Flow
Observations Concepts Concept Concept
from
Operators
&
Other Sources

Energy
Operating
Inputs:
Conditions Information
Fuel
of Transmitters
Chemistry & Filters Steam
Pumps, Valves Pressures
of Streams, Temperatures
Agitators Vessel Cooling
Products, over Time over Time
Motors & Levels & Water
Feeds, & & &
Instruments Conditions
Inventories "Right Now" "Right Now"

Abstract Concepts Are Represented by Discrete State Brackets

The operator’s “process stability” concept is built from a number of other abstract,
similarly qualitative concepts for heat balance, instrument condition, mechanical condition,
chemistry and reaction kinetics, fluid flows, and so on. It is also built upon judgments and
strategies for interpreting information from instruments, facts from measurements and lab
tests, and many other inputs, perspectives, concepts, expectations or judgments. One such
concept is the heat balance situation of the process. This concept includes discrete states
(brackets) such as “The heat balance is stable and within reasonable limits”; and “The heat
content of the process is gradually decreasing.” Other, more complex concepts are associated
with the conditions of heat exchangers, the rates of exothermic and endothermic reactions in
the process, the temperature of cooling water, enthalpy of process steam, even the influence of
heavy rains on the equipment. We need to point out that the operator does not keep explicit in
her mind the hundreds of discrete states that are associated with all the concepts. Instead, she
may only think explicitly about the discrete state brackets for the major concepts such as the
“Process Stability” itself.
162 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Stability is a concept of shared expertise among the operators, although all of them may
interpret it differently when they work. In particular, they have different perceptions and
patterns in mind when they interpret the minute-to-minute operating behaviors. In addition,
they use different judgments and qualitative models when considering the interactions
between the heat balance, the fluid flows, and other process conditions. These knowledge
units are part of the operator’s personal knowledge and are constantly updated, confirmed,
revised, and expanded. Only when operators have fully automated their working knowledge,
or become tired of the job and disinterested, do they stop updating their knowledge. At such a
point, they are in danger of becoming “stagnant.”

Figure 5-7. Abstract Concepts in the Mind of a Knowledge Worker:

Crude Oil Trading Supply and Demand Balance.
Buyers Behavior & Demand
Overall
Potential Plans Projections
Supply & Demand
Balance
Europe may
come Diesel inventories
Market is into market as are low
moving upwards large buyers If the new coffee
cartel rises prices
Market is edging Hershey is people wil switch
downwards buying sugar
A few big buyers- futures
otherwise nothing
Many ....

....

Jones acts hastily

when supply is short
Many producers
Swift tries to sell have excess capacity
on early rumors

Sellers (Suppliers) Supply Projections

Behavior &
Potential Plans

Crude Oil Traders Also Maintain Abstract Concepts

Just as the refinery operators have abstract concepts for “process stability,” oil traders
have abstract concepts for supply/demand balances and other complex notions that they deal
with regularly. These concepts are also built on other abstractions, expectations, facts, and
specific information such as observed, surmised, or expected behaviors and plans of buyers
Approaches to Characterizing Knowledge 163

and suppliers, demand-and-supply projections, and a numerous other factors that go into these
abstract concepts. A simplified diagram of this type of concept is shown in Figure 5-7.
This figure is simplified to show only a few aspects of the supply-demand concept
considered by the trader. In many ways, the oil trader has to face a more complex set of
concepts than the refinery operator. They are more complex in three respects:
1. The causal chains that the oil trader needs to consider are associated with social and
economic systems, which are not as easily subjected to measurements and cannot be
established scientifically in the same way as physical systems. Process plants are also not
well understood, but not to the same degree as social and economic processes since we
can often perform controlled experiments on them to learn about their behavior. The
refineries are also man-made making it possible for us to know them better.
2. The “systems elements” that the oil trader has to consider consist of people who, for the
purposes of trading strategies, may have relatively unexpected (stochastic) behaviors, may
be difficult to “read,” may misrepresent themselves intentionally, and so on. These
factors make it necessary for the trader virtually to have separate models for the different
people they deal with; they may even have a different menu for the potential states those
individuals may take on.
3. The oil trader engages in a “game against active adversaries,” whereas the refinery
operator is engaged in a “game against nature,” which may be considered to be passive.
The oil trader must keep in mind a schema or meta-strategy for how to trade with the
active adversaries. At the same time, he has to assemble intelligence and assess the
symbolic states for such concepts as “How well is my strategy working and where are the
oil-trading negotiations headed at this time?”
As a result of these conditions, the oil trader lives in a very abstract and highly
competitive world that requires considerable mental activity to operate successfully in.
In addition, the oil trader considers a set of models of how the world operates, how the
different situations may be expected to evolve, and how well different strategies may work
out. Most of these models are kept in the trader’s mind. While some models can be
externalized and captured in the form of computer models in knowledge-based systems, most
are personal incorporating individual views, believed causalities, concepts, judgments, and
hypotheses.

ABSTRACT KNOWLEDGE CAN BE CODIFIED, EVEN AUTOMATED

We often need to automate knowledge in inanimate forms, such as storing it as explicit

knowledge in knowledge bases or knowledge repositories or by modeling it for other
purposes. In these situations, limited knowledge associated with abstract concepts can be
elicited from the experts and codified. This is often performed by a knowledge professional
who has particular expertise in this area. The abstract concepts, their relevant symbolic
bracket states, associations, and chunkings must be represented in sufficient detail to reason
with it to infer that particular states have obtained. In particular, if the
knowledge is automated in a knowledge-based system, it must be represented in a clear and
164 Knowledge Management Foundations:
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understandable manner so that:

1. The experts and others responsible for the quality of knowledge can follow the reasoning
process the automated reasoning process follows in order to verify and validate the
correctness and appropriateness of the knowledge as well as the process of reasoning
about the particular situations.
2. The automated system can distinguish between the various conditions and situations that
expert advice is desired for.
3. The users’ conceptual perspectives and understanding (at times these are different from
the experts’) can be matched to let the system provide as close a cognitive match to the
users as possible.
Typically, representation of abstract concepts can be supported by most of the
representation schemas now available in knowledge-based or expert system tools. However,
it is easier for the implementers if the tools can support complex representations such as case-
based reasoning, black-boards, qualitative or “fuzzy” reasoning, “semantic nets,” and object-
oriented “frames.”

Building Mental Models for Abstract Concepts

Knowledge workers need to work on several conceptual levels when they deal with
practical situations that require examination and analysis of complex conditions to form
mental models of the situation’s state. A general script of their knowledge-intensive
activities seem to emerge as illustrated in Figure 5-8.
On a relatively concrete and procedurally straightforward level the knowledge workers need
to find the facts about the situation -- information that describes it. Initially, that may involve
assembling the information presented. Immediately after having received the first
information, they proceed to a higher conceptual level to examine, analyze, and evaluate it to
determine what it means. Based on the meaning -- what the information “tells” about the
situation, how complete it is, what is missing, and the associations it raises, the knowledge
workers make plans for next steps in the process to build the picture of the situation. At the
same time, on a higher conceptual level, the knowledge workers start to assemble the picture
of the situation by matching the meaning of what has been determined to a broad conceptual
model of the situation. This mental model is typically highly abstract and we can often
represent it with a concept hierarchy.
The process may proceed iteratively at all levels as the knowledge workers return to the
concrete level to gather more information, then continue to analyze and evaluate it, to
gradually build the mental picture of the situation until it is considered to be adequate or
complete.
Approaches to Characterizing Knowledge 165

Figure 5-8. Building Mental Models and Associative Networks Involves Mental
Operations on Several Conceptual Levels.
An Example from Knowledge-Intensive Activities to Determine “What It Means” and
Decide What to Do in a Customer Service Situation.

Increased -- Reframe --
Conceptual
Level
Change Overall Strategy
Customer Driving Forces Generate Decide & Implement &
Situation Customer Alternatives Plan Action Replan
Mental Model Intent

Analyze & Evaluate Detail Implement

Plan Next Process Step Action Plan & Adjust

What Detailed
Gives? Facts
Fact Fact Fact
Fact Fact Fact
Finding Finding Finding
Finding Finding Finding

Target Situation

Knowledge Scripting and Work Function Profiling

Characterizing organizational uses of knowledge can be very complex. Widely different
knowledge areas are often used by different people with different levels of expertise with
marked effects on quality of work and the ability for the organization to act intelligently. We
require manageable approaches to gain overview of these knowledge situations and that also
provide us with appropriate ways to handle them.
Scripting of knowledge-intensive activities and knowledge profiling of target business
processes provide comprehensive representations of available and required knowledge. These
approaches are used to explicate knowledge-intensive activities and describe knowledge,
skills, and personal characteristics that are required for dealing competently with both routine
and unusual tasks and notable exceptions. The approaches are used to explore opportunities
for improving knowledge in personnel, pooling resources through teaming, networking, and
collaboration, or for providing knowledge supports such as knowledge-based systems.
Knowledge scripting and profiling provide powerful complements to business process
reengineering and other management initiatives that lead to organizational restructuring and
changes in allocation of responsibilities. In those cases, the approaches offer methods to
166 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

manage and maximize effective use of expertise and other human characteristics. They
describe knowledge-related and intensive aspects such as:
• Scripts for routine and exception tasks for most important Task Scenarios1
• Knowledge-Intensive Steps in each important script
• Knowledge-Intensive Activities within each knowledge-intensive step
• Concept Hierarchies for dominant knowledge-intensive steps
• Knowledge Segments, Reference Cases, or other knowledge items required for each
knowledge-intensive activity
• Information Items required for each knowledge-intensive activity
• Goals, Strategies, and Methodologies used by knowledge workers in each step and
activity
• Knowledge, Skills, and Personal Characteristics Profiles needed for each step
The knowledge scripting and profiling methods are extensions of, and build upon task
environment analysis and modeling (TEA) and knowledge use and requirements analysis
(KURA) and knowledge profiling for personnel evaluation methodologies.2

Composition of Knowledge-Intensive Work

Within each knowledge-intensive step we find knowledge-intensive activities. Some are

observable while most typically are hidden from casual observation since they are performed
within the minds of the caseworkers. An example of an observable knowledge-intensive
activity within the knowledge-intensive step of “Identify and validate caller” is when the
caseworkers “Ask open questions to verify information given.” By illustrating the various
activity scripts in this manner, we are able to be highly specific with regard to the nature of
each task. At the same time, we need to provide a sufficiently flexible framework to express
different variants of the script and hence allow us to group like scripts into clusters since there
normally will be many variants.
We have two objectives for identifying knowledge-intensive scripts and activities. The
immediate objective is to establish in some detail which knowledge, which skills, and which
personal characteristics are required to perform the required work with quality results. The
breadth of required work will normally involve execution of all of the knowledge-intensive
scripts that are described. By identifying the different knowledge areas and existing
proficiencies and establish the associated knowledge requirement profiles side-by-side of the
various individuals’ profiles, we can determine opportunities for growth through education
1 “Task scenarios” consist of tasks to be performed to handle a particular “job” from its entry
into the business process until it has been fully completed. It is important to follow specific
task scenarios through the complete target business process. Different task scenarios will
follow different scripts with different knowledge-intensive activities, reasoning, problem-
solving, decision making, and knowledge requirements.
2 These methods are described in Knowledge Management Methods, (Wiig 1995).
Approaches to Characterizing Knowledge 167

and training. We can also determine requirements for new hires. Additionally, we can
determine potential areas for specialization and knowledge-intensive work distribution.
A second objective is to identify which scripts will be required to provide specific services
and to support individual work products. The “dual” of this objective is to identify which
activities and knowledge is historically required to deal with unnecessary problems that may
exist with present products and services. Such inappropriate knowledge requirements may be
reduced, or even eliminated, by changing the basic work.

Example of Knowledge Profiling for Customer Service1

In a consumer product manufacturing and mail order retail firm’s customer service
environment, the central task is represented by the script for routine interactions. This task
takes place when customer service representatives (CSR) answer incoming calls from
customers. The script consists of eight knowledge-intensive steps as illustrated in Figure 5-9.

Figure 5-9. Script for Routine Customer Interaction

Verify
Caller

Form Picture Provide

of
Caller Information

Reassure Planning Offer

of
Customer Next Step Alternatives

Identify Explain
Hidden Message Alternatives

Process
Transaction

1 This example was motivated by work performed by Sue Stafford and Dorothy Yu. These
knowledge professionals also provided broad perspective of how competencies can be
investigated and represented.
168 Knowledge Management Foundations:
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Figure 5-10. Knowledge-Intensive Step to “Verify Caller.”

A
Ask open questions to
verify information given
F B
Type information and Think of several
approaches to verify
conduct conversation
caller
E C
Determine caller Listen for "red flag"
attitude and mindset messages and problems
D
Listen for caller
emotions

Figure 5-11. Concept Hierarchy for Determining Customer Situation.

Mental Picture of
Customer's
Situation

Recent Customer's Previous Customer Reasons for

Communi- Potential Relations as an Using Our
cations Perception of with Our Individual Products
Our Company Company

Sales What Is History of Age Quality

History Wanted Now? Returns

Word of DoWe Meet Account Occupation Life-Cycle

Mouth Expectations? Activity & Hobbies Costs & Price

Earlier Long & Steady Account Family / Compatibility

Contacts Relationship? History Children

Face-to-Face Any Biased Account City vs. Reliability

Interactions Perceptions Balance Small Town
?
• Gauge knowledge level of customer.
• Figure out product use pattern.
• What products and services make sense for this customer?
• Determine (by making assumptions) customer intent.

The routine customer interaction tasks deal with queries or requests for particular
transactions. Nonroutine and unusual tasks take on many forms and may require special
expertise to identify and handle. Although they are nonroutine, these tasks still are considered
Approaches to Characterizing Knowledge 169

part of the regular job requirements. Each knowledge-intensive step consists of several
Observable and Hidden knowledge-intensive (K-I) activities. For example, the step “Verify
Caller” consists of six K-I activities. Note that only two are Observable while the remaining
four are Hidden. The K-I activities are:
• Ask open questions to verify information given -- Observable
• Think of several approaches to verify caller -- Hidden
• Listen for “red flags” -- Hidden
• Listen for caller emotions -- Hidden
• Determine caller attitude and mindset -- Hidden
• Type information and conduct conversation -- Observable
It cannot be assumed that the activities take place in a certain sequence as indicated
implicitly in Figure 5-10. Any activity can be the “entry point” (the first activity performed)
followed by other activities in almost any sequence.
An even more complex knowledge-intensive step is “Form picture of caller” which
consists of a number of K-I activities. Again, most of these activities are hidden and deal with
complex knowledge-intensive tasks to establish an abstract mental picture -- a
characterization of which symbolic concept state best describes the customer (see the next
section). The complexity and invisibility of this task is indicated by the simplified concept
hierarchy shown in Figure 5-11 for the customer service situation.

Table 5-3. Knowledge, Skill Areas, and Personal Characteristics of Importance.

Knowledge Areas Skill Areas Personal Characteristics
Idealistic Mental Functions Action Orientation
Hidden messages by callers Quick thinker Extrovert
Analogies Synthesize information Inquisitive
Sales aspects Shift and focus on new topic Asks questions
Systematic Prioritize work Self Reliance
Product marketing world Reception Functions Confident
Product application methods Listening Positive self-image
Product life cycles Quick learner Approach Attitudes
Customer service Production Functions Positive, pleasant, sincere
Pragmatic Verbal communication Realistic
Company business Written communication Adaptive
Product knowledge Team participation Patient
Product alternatives Follow-through Emphatic
Product policies Automatic Functions Unemotional
Customer information Telephone use Preferences
Automatic Keyboard and computer Likes phones
170 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

The important knowledge areas, skills, and personal characteristics for our example are
indicated in Table 5-3. As shown, each of the three dimensions was made up of a total of 12
categories. Not all categories pertained to every knowledge-intensive step. In the aggregate,
however, all 36 categories were required for proficient CSRs, to varying degrees. We
arranged the categories by conceptual level for knowledge and by type for skill areas and
personal characteristics. (Note that all the skill areas correspond to the automatic conceptual
knowledge level.)
When the desired profiles for all important knowledge-intensive steps have been
determined, it is possible to determine the composite profile for the overall task that the CSR
(the example knowledge worker) needs to handle. The number of capability characteristics is
high and requires an approach that leads to easy understanding. We use knowledge profiles
to present explicit and easy-to-perceive overviews of the specific capabilities required for the
different knowledge-intensive steps and for the overall customer service task illustrated in
Figure 5-12. We show separate polar diagrams for the three dimensions of knowledge, skills,
and personal characteristics. In addition, we may group them by conceptual knowledge level
for knowledge and by types for skill areas and personal characteristics. In Figure 5-12 the
groupings are indicated for better overview.
In this example, all three dimensions were specified with 12 categories. The number of
categories may vary from as few as six to as many as 15. If the number of “equally
dominant” categories appears to be higher, considerations should be given to consolidating
some or otherwise reducing the number.

Task Environment Analysis and Modeling

A broad way of characterizing knowledge and related entities is provided by the Task
Environment Analysis and Modeling (TEA) and its companion approach Knowledge Use and
Requirements Analysis or (KURA).1 These approaches are relatively in-depth investigations
to provide specifics on the intellectual functions in the task environment, flows of knowledge
between people and other “agents,” as well as other knowledge-related processes that exist in
the environment, ranging from learning and pooling of knowledge, to the creation of new
knowledge through development, research, or innovation. Normally, the level of detail of
knowledge characterization does not go below that of Knowledge Segments or Reference
Cases. TEA and KURA describe only “what the knowledge is about,” not what it is.

1A “task environment” is considered to include all aspects associated with a work function
and encompasses everything that relates to the function, such as the people, their setting, the
work objects (as incoming work pieces and as finished products), information, knowledge, all
artifacts such as tools (from computers to hammers), practices, traditions, beliefs and
superstitions, and so on.
 Approaches to Characterizing Knowledge 171

Figure 5-12. Profile for Knowledge, Skills, and Personal Characteristics for the
Customer Service Representative’s Knowledge-Intensive Scripts.
Idealistic Knowledge Mental Functions
Proficiency in Reception Functions Proficiency in
Customer Synthesize
Proficiency in Proficiency in Proficiency in Proficiency in
Hidden Information
Sales Message Quick Shift
Analogies and
Aspects E Thinker E
Focus
P P
Financial Company Listening Prioritize
World C Business C Work
Systematic Knowledge

A A

Investment B Product Quick B Verbal

Concepts & Knowledge Learner Communication
Principles I I
E P C A B B A C P E E P C A B B A C P E
B B

A A

People Product Telephone Written

C Alternatives ge C

Au
Lifecycle Use Communication
d n s
le

t
io

om
P
o w P
t
nc

at
Customer Product Kn Keyboard Team
Fu

ic
E E
it c and

Fu
Service Policies Participation n
Customer a Follow- io

n
Computer
m ct

ct
Information g through
u

io
a
Pr od

ns
Action Orientation
Pr

Knowledge
Inquisitive Skills
Extrovert Asks
E Questions I - Ignorant
I - Ignorant B - Beginner
B - Beginner V A - Advanced Beginner
A - Advanced Beginner Positive
nce

Confident C - Competent Performer

C - Competent Performer N Pleasant P - Proficient Performer
Relia

P - Proficient Performer Sincere E - Expert

E - Expert S
Self

Positive B
Realistic
Self Image
I
E V N S B B S N V E
B

S Personal
Characteristics
Pre

Likes Adaptive
N
fer

Phones
enc

V I - Inept
es

Unemotional B - Barely
E Patient
S - Somewhat
Empathetic N - Normally
V - Very
E - Extremely
Approach Attitudes

The particular value of TEA and KURA is that they relate knowledge flows, use, and
control to the other activities in the task environment, allowing us to analyze and synthesize
within a broad perspective how the overall function may be strengthened by improving
directly knowledge-related aspects. Since TEA and KURA pursue a broad area, many topics
are investigated simultaneously. Each topic area within the target function has a scope that
can be summarized as indicated in Table 5-4.
To a larger extent than other knowledge-related analysis work, TEA and KURA allow
explicit identification and analysis of cultural factors that affect knowledge creation, use, and
flows. By identifying and characterizing the other factors that are affected explicitly, the
cultural facets -- such as beliefs, practices, and so on -- that result in inhibitors, facilitators,
and missing elements are more readily identified and corrective measures can be synthesized
and accepted for implementation by the organization. In addition, and perhaps more
172 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

importantly, explication of these factors facilitates open discussions of topics that previously
were often considered taboos.

Table 5-4. Knowledge-Related Items Described In A Task Environment Knowledge Use

and Requirements Analysis.
1. Areas of Knowledge (Experience; Expertise; Proficiency; Competence; Skill; Capability)
are mentioned explicitly during interviews or “Talk-Alouds.” Areas mentioned implicitly
as part of other topic categories may be repeated here. Areas are summarized as:
Knowledge of, with indication of Conceptual Knowledge Level where possible.
2. Knowledge-Intensive Tasks are work activities such as problem-solving that require
specific knowledge or expertise to be carried out. Tasks are summarized as: Task,
Knowledge of, Information on, May lead to decision on, and Other Work Products.
3. Decisions are statements referring to specific conclusions with resulting acts. Decisions are
closely related to many knowledge-intensive tasks such as problem-solving analysis and
synthesis. Decisions are summarized by title and required support as: Knowledge of, and
Information on.
4. Knowledge Flows deal with transferring or pooling expertise or special knowledge. Some
knowledge flows take place on demand, while others are regular occurrences. Many are
part of consulting with others or on-the-job learning. Knowledge Flows are summarized
as: Knowledge Transferred, Transfer Mode, Pertains to. When pertinent, Strengths,
Weaknesses, and Knowledge Flow Dimension are also indicated.
5. Information Flows concern transfer of information from one source to an individual or a
function. They are summarized as: Information Transferred, Transfer Mode , and Pertains
to.
6. Practices -- management, operational, and personal work practices that govern the behavior
and performance of the task environment.
7. Inhibitors pertain to anything that constrains the performance of the function -- whether
physical, resource-related, traditions, and so on, and are summarized by brief statements.
8. Cultural Themes are the accepted beliefs, hypotheses, and abstracted traditions of the
organization that influence people’s acts. Unspoken policies and informal cultural
behaviors are part of the themes. Cultural Themes are summarized by: Theme Category
and brief statements.
9. Taxonomies are specific organizing relationships for the Task Environment and accepted
by the organization. Examples are: the structure of the Task Environment’s work objects,
products and services, tasks, resources, artifacts, the organization’s configuration, and so
on. They are listed.
10. Task Environment Components range from knowledge workers present, individual
artifacts used to perform tasks, and specific concepts (such as the concept of a “completed
business analysis”) used to identify physical and mental “things.” They are listed.
11. Task Domain Areas are numerous in most Task Environments, ranging from the domain
of Work Practices, Knowledge Required, Information Used, Stored, and Generated,
Financial Affairs, Human Resources, to the Physical Work Place. They are listed.

To illustrate how the results from TEA and KURA characterize knowledge, an example of
description of a “knowledge intensive task” is illustrated in Table 5-5. All the other
Approaches to Characterizing Knowledge 173

knowledge-related factors indicated in Table 5-4 must be described in similar detail to allow
the analysis to proceed.

Table 5-5. Example of Knowledge-Intensive Task Summary Description.

Knowledge-Intensive Task #14.

Task: Evaluate if the right people are available for particular positions.
Function: Is part of management responsibility and is performed particularly during annual
planning, staff reduction, or expansion periods.
Interview: “We must always ask if we have the right people -- but we often neglect to do
that!”
Knowledge of: What is required to perform quality work for the positions in question. What
a quality job is. Different approaches to assessing individuals’ capabilities. Which
management style prevails within which the individuals will operate and what that entails.
The key individuals involved.
Information on: Skills and capabilities of the people (estimates and assessments as in a
“Skills Inventory”). Map of capabilities requirements for position.
May lead to decision on: Education and training, hiring, firing, promoting, and reassigning.
Business restructuring and reorganization. Business process reengineering.

Other Ways to Characterize Knowledge

In addition to the knowledge profiles described in the previous section, many other ways
are available for characterizing knowledge and its features. Some are more powerful and
detailed, but require considerably more effort to use, yet may not yield as clear portrayal of
the knowledge involved. When we chart knowledge, we generally need several ways to
characterize the different features of knowledge, how it is used, who uses it, and several other
knowledge-related issues.
A particular type of knowledge characterizations are the formal knowledge
representations such as the if-then rules and reference cases used for many knowledge-based
systems (KBSs). Many kinds of these explicit representations are used to describe the
knowledge content itself and to codify knowledge for automating reasoning or preserving it in
knowledge bases (computerized or not) for later access. Many hope that free-form natural
language will some day constitute an appropriate knowledge representation. However, even
natural language is limited and needs to be augmented with other representations such as
images, flow diagrams to depict evolving processes such as scripts, computational methods,
and many others.
174 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

OVERVIEW OF CHARACTERIZATIONS

We work with a number of additional ways to characterize knowledge. Some are

discussed briefly below and include:
• Knowledge Flow Models
• Concept Hierarchies and Concept Relatedness -- Associative and Semantic Networks
• Matrix Representation of Knowledge Forms and Types
• Scripts
• Natural Language Knowledge Models and Stories
• Codified Knowledge Models

Knowledge Flow Models

Knowledge flow models are the most important tool for charting how knowledge is used
in business. Models of how knowledge flows within and between work tasks and knowledge
workers provide insights into a number of knowledge-related issues. It allows us to identify
knowledge bottlenecks, thereby offering opportunities to change the knowledge flow to
improve the operation of the task. Knowledge models are often inherent and distinct parts of
task environment models.

Concept Hierarchies and Concept Relatedness -- Associative and Semantic Networks

The concept hierarchies and concept relatedness networks discussed earlier are used to
provide overviews and descriptive portrayals of detailed knowledge. Thus, we use these
models to gain overviews and to describe the major concepts within a knowledge area and
how they relate to one another and are associated with concepts outside the knowledge area.
We perform these analyses to increase our understanding of the concepts that are included in
the domain and how they relate to each other and are organized when used to perform work
tasks.
When we work to gain an overview of the knowledge for some of the more detailed KM
activities such as reengineering a task environment, we often need to identify the major
concepts and their relationships. We use these perspectives in support of the knowledge flow
models discussed above.

Matrix Representation of Knowledge Forms and Types

Matrix displays are used to indicate the form and type of knowledge (as indicated in Table
4-3) both for aggregated and detailed knowledge. The matrix representation and placement of
knowledge objects in the knowledge form-type framework permits us to indicate the
Approaches to Characterizing Knowledge 175

knowledge’s particular form (public, expert, or private) and type (facts, concepts,
expectations, or strategies) and its nature in terms of how well known it is, how subjective or
factual is it, how complex is it, and so on. Matrix tableaus of knowledge are also used to
indicate where knowledge segments and elements for specific tasks or jobs are located in
these two dimensions.

Scripts

Scripts characterize knowledge of how particular situations develop and what the
expectations are various scenarios that may obtain. A typical script for knowledge-intensive
activities may identify the steps in a particular work process, and specify what the beginning
conditions and objectives are, who the actors are, what the separate activities are, and what
the expected outcomes should be. Scripts are used both for overviews and for detailed
characterizations of the knowledge itself. Overview scripts are useful for providing
understanding of what the different knowledge segments and elements are when we try to
understand a critical knowledge function in greater detail to reengineer it.

Natural Language Knowledge Models and Stories

We use natural language models and stories to provide narrative and discourse
descriptions of the knowledge. Natural language knowledge models are typically presented at
two levels. The upper level contains abstract description of the knowledge to indicate what
the knowledge is about, how it is organized, its level of completion, its relation to other
knowledge areas, and a number of similar issues. The lower level contains natural language
descriptions of the knowledge itself. It explains what is known. Natural language models of
this kind often rely on diagrams and images to provide additional information about the
knowledge.
An important aspect of effective natural language models is that they do not only describe
the knowledge, but they also may provide implicit directions for how to interpret the
information that is presented. They provide perspectives to understand and integrate the
material with the context and what else might be known.
Stories are very important natural language models. They are used to give examples of
representative knowledge elements and may depict particular (and isolated) episodes. That
also is the case for reference cases when they are represented as stories. Stories may be in
free-form natural language or may be formalized in more structured forms such as explicit
scripts.1

1Roger Schank (1990) provides an interesting perspective on the importance of stories in the
way people hold knowledge in his book Tell Me a Story.
176 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Codified Knowledge Models

Codified knowledge models are assemblies of knowledge characterizations for overview

or detailed content. We assemble codified knowledge models by describing a knowledge area
from several perspectives such a knowledge flows, concept models and, typically, with
detailed characterization of the knowledge content using a representation method.
Codified knowledge models are usually assembled from detailed knowledge that has been
elicited from experts or assembled using other sources such as rules or regulations, large
numbers of examples as inputs to automatic induction systems, or even neural nets. Other
kinds of codified knowledge models include programmed texts, detailed procedures manuals,
and similar passive documents.
Part III

About Knowledge:
How It Is Exchanged and Used
As indicated in Part II, five major subject areas make up the basic functions of the
foundations of KM, forming the overall process that we wish to manage. The process starts
with capturing and creating “what is worth knowing” and ends when we achieve the “business
value of using knowledge effectively.” It is shown schematically in figure III-1.

Figure III-1. The Five Subject Areas of Knowledge Management.

What Knowledge
IS

How
Knowledge How BUSINESS
What is is Knowledge is VALUE
WORTH ACQUIRED USED of Using
KNOWING (learned) in Knowledge
(codified) Practice Effectively
(built)

How Knowledge is Arranged

How Reasoning and Thinking are
and Organized to Make It
Useful PERFORMED

The five areas include: (a) How knowledge is acquired (learned, codified, built); (b) What
178 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

knowledge is; (c) How knowledge is arranged and organized to make it useful; (d) How
reasoning and thinking are performed; and (e) How knowledge is used in practice.
In this part, we focus on the “dynamic” features of knowledge: How we expand and
transfer it between parties; and How we rely on it when we change the world around us by
solving problems and make decisions. We build upon the material discussed in Part II to
examine three of the five subject areas in some detail. We start by exploring “how knowledge
is acquired -- learned, codified, and built” followed by “how reasoning and thinking are
performed.” Lastly, we explore “how knowledge is used in practice.”
We continue to discuss other topics that are part of the foundations for how we manage
knowledge. These topics include: how knowledge influences networking in organizations and
among people, and how we work together in teams.
The material presented in this part -- as in the previous part -- does not provide a
comprehensive treatment. The material has been selected to reflect aspects that we have
found to be useful from the perspective of managing knowledge in business.
 How Knowledge is
ACQUIRED

Chapter 6
Learn!
-- Create and Exchange Knowledge

This Chapter
In the previous chapters we discussed how knowledge can be viewed from different
perspectives and how it may be organized and characterized. These were mostly static views
of knowledge. In this chapter we start to introduce dynamic aspects of knowledge -- how we
learn by transferring existing knowledge and create new knowledge, the most basic of
knowledge flows.
We start by introducing the need for continual learning in order to progress. It then
presents the “ideal knowledge worker” in terms of different kinds of knowledge and how lack
of knowledge may lead to narrow-mindedness. An important aspect of personal and
organizational learning is innovation and creativity. This topic is discussed with a focus on
adding knowledge and creating new knowledge through exploration, experimentation, and
innovation.
Learning may involve different flows of knowledge from one party to another. This
concept is introduced and related to different models -- the learning theory model, five stages
of learning, and seven basic learning strategies. We introduce organizational learning and
then personal learning in more detail to discuss different styles and processes. Brief
discussions are provided of schema, script, routine, and event learning, difficulties with
changing beliefs, and learning as it is related to the four conceptual knowledge levels. Since
much learned knowledge becomes tacit, we discuss the four transfers of tacit and explicit
knowledge and what effects they have on the efficiency of learning.
We learn to build on other’s experiences -- to ascend the knowledge spiral. We present
the need to be flexible and versatile and to pool knowledge and introduce motivators for
learning and some final perspectives on learning.
180 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

We Need Knowledge to Improve!

One basic notion of progress is that we steadily must improve. We must regularly create
new opportunities and find better ways to solve problems. We expect that we continually and
relentlessly make things better for ourselves, for others, for the organization we work for, and
for society as a whole.
To improve, we must bring our organizations at all levels -- families; our service
providers; the companies that we work for; and our local, state, and country’s governments --
to all act more intelligently.
To improve, we must stand on the shoulders of the giants that have gone before us. We
must select the best knowledge that they have developed in the past, build upon it and expand
it, so we can ascend the knowledge spiral.
To improve, we must steadily make our knowledge better and more complete and enhance
the ways we use it. We must discover, develop, and invent new and better ways by creating
new understandings. We must learn from what others have done -- their successes and their
failures -- and discard old knowledge that no longer is valid or useful.
To improve, we must enhance our capabilities to apply the knowledge that is available to
us to generate the results we seek. We must spread the best knowledge around to all who can
use it and make sure they are encouraged to use it and that its use is facilitated by providing
capabilities and incentives and by eliminating hurdles that prevent its use.
To improve, we must empower everyone to increase their contributions -- by increased
skills and greater proficiencies and by allowing them to contribute what they know. Progress
also requires that we let the organization learn -- that we improve the organizational
knowledge by creating new knowledge, capturing tacit and ephemeral knowledge, and
embedding knowledge in all its possible manifestations to make it available and useful.
To improve, we must continually acquire and create new knowledge -- we must learn --
and put it to use! This applies equally to us as individuals and to our organizations.

THE IDEAL KNOWLEDGE WORKER

In order to obtain intelligent behavior from our organizations, we need to staff them with
creative and effective knowledge workers in addition to all the other factors and capabilities
that are needed. Ideally, knowledge workers must be both knowledgeable and proficient.
They must be able to both understand and do. They must demonstrate a number of general
characteristics that, although difficult to attain in practice, nevertheless are the goals we strive
to meet. Ideal knowledge workers must:
• Be well educated and trained and highly proficient within their specialty area
• Possess extensive specialty knowledge on all four conceptual knowledge levels
Learn! -- Create and Exchange Knowledge 181

• Possess broad and deep world knowledge -- again on all four conceptual knowledge levels
• Be creative and innovative
• Be capable of acting intelligently in all situations
• Have broad and effective interpersonal skills
• Be able and willing to share the organization’s values and goals
The objectives behind many of our knowledge-building tasks are to help individuals
progress to become more capable and effective by obtaining these characteristics through
education, training, personal innovation, and in any other way desirable. That is the first step
on the road to create a knowledgeable and intelligent-acting organization.
The next steps are associated with providing the management practices, culture,
infrastructure and organizational shape to support the desired changes. Other steps involve
determining the areas of knowledge assets that need strengthening, where corporate learning
is needed, and how to set strategy and tactics to create the needed knowledge capabilities and
realize the value of the corporate knowledge assets.

Figure 6-1. Deep Understanding and Knowledge of Techniques Contribute to Our Skills
and Proficiencies.

Understanding
and
Deep Knowledge

Knowledge of
Proficiency Techniques

Skills

Different Knowledge Results in Different Capabilities

When we consider how we can improve by increasing our knowledge, we must identify
how different areas of knowledge affect our ability to function. To progress, we need to
182 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

increase our skills and know-how. We also need to increase our broader proficiency (i.e., our
in-depth competence based on deeper knowledge and experience) to make us flexible and
versatile to be able to perform competently as the world around us changes. As we build our
approaches to creating new knowledge and learning, we also must identify which knowledge
we need to obtain, not only in the form of which subject matter to pursue, but equally
important, at what level of understanding and for which purpose.
The relations between understanding and deep knowledge, knowledge of techniques,
proficiency, and skills are indicated schematically in Figure 6-1. We consider skills and
know-how to be based primarily on knowledge of techniques with a limited basis of deeper
knowledge and understanding.
Proficiency is chiefly based on deep knowledge and understanding, but is also partly
based on knowledge of techniques. We all experience some overlap between proficiency and
skill. As will be discussed below, skills and know-how -- knowledge of techniques -- are
basically developed through training whereas understanding and knowledge are developed
through education. In all instances, however, all these capabilities can be further improved
through innovation and learning, both for the individual and for larger entities like
corporations.

Figure 6-2. Examples of Narrow- and Broad-Minded Personal Profiles.

Conceptual Conceptual
Knowledge Level Knowledge Level

IDEALISTIC
Vision & Paradigm
Knowledge

SYSTEMATIC
System & Schema
Knowledge

PRAGMATIC
Decision Making
Knowledge

AUTOMATIC
Routine Working
Knowledge

Breadth of Breadth of Breadth of Breadth of

Specialty World Specialty World
Knowledge Knowledge Knowledge Knowledge
Narrow-Minded Person Broad-Minded Person

Narrow-Mindedness and Broad-Mindedness Are Often Functions of the Individual’s

Knowledge!

Narrow-mindedness is frequently a function of insufficient knowledge and understanding.

Thus, ignorance often causes the rigidity and strongly biased opinions that we associate with
narrow-minded behavior. Opening people’s minds so they become more broad-minded and
creative can be achieved by increasing their knowledge and by helping them learn to keep
abreast of the changes around them. We can characterize salient aspects of narrow- and
Learn! -- Create and Exchange Knowledge 183

broad-mindedness by considering three knowledge-related dimensions: (a) breadth of

specialty knowledge; (b) breadth of world knowledge; and (c) the four conceptual knowledge
levels. Examples of qualitative profiles for a narrow-minded and a broad-minded person are
included in Figure 6-2.
The narrow-minded person who, in this case, rates as a competent performer in his
specialty area has considerable routine working knowledge, good, but less decision-making
and factual knowledge, still less system, schema, and reference-methodology knowledge, and
limited vision, goal, and paradigm knowledge. His world knowledge is quite limited with
some routine working knowledge (his social and local geographical skills are normal), less
Decision-Making knowledge, much less system, schema, and reference-methodology
knowledge (i.e., understanding of social and political systems, and so on), and very limited
vision, goal, and paradigm knowledge.
The broad-minded person is an expert. Her specialty area may be less developed than the
narrow-minded person’s routine working knowledge. However, compared to a narrow-
minded person, she has more decision-making; system, schema, and methodology knowledge;
and vision, goal, and paradigm knowledge, making her more flexible and versatile within
these areas. Her world knowledge is extensive, with considerable automatic and pragmatic
knowledge. Her systematic and idealistic knowledge allow her to have deep understanding
and integration of what takes place around her.
As a result of broader and deeper knowledge, the broad-minded person can relate
specialty knowledge to changes in the environment in ways that the narrow-minded person
cannot. Equally important, by having much greater understanding of root causes and
underlying factors, the broad-minded person is able to be creative with a much broader scope
as well.

Innovate and Create Knowledge!

Some Principles of Knowledge Creation and Knowledge
Building
It is exceedingly important that we foster creation of knowledge by everyone in the
organization. People are incredibly smart, and given the right motivation, understanding, and
resources they will continually innovate to make their world easier and more acceptable.
Further, if their understanding and incentives are right, they will innovate to make the world
more effective, functional, and supportive of the organization’s goals.
It has been argued that personal innovation and on-the-job creation of new knowledge, to
a great extent is responsible for the continued success of most organizations. That seems to
be the case where self-managed teams are the norm, but it also may be the case in all other
organizations as well. Hence, it is important to facilitate innovation by ascertaining that the
appropriate factors such as those indicated in Table 6-1 are made readily available.
184 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Table 6-1. A Few Factors Required for Successful and Useful Innovation.
Motivational Factors
Incentives and rewards for creating “new and better ways”
Enhanced peer standing for creating improvements
Knowledge-Related Factors
Understand organization’s objectives
Understand organization’s and function’s practices and operating constraints
Understand operational aspects of the function -- If the conceptual knowledge level is:
Automatic knowledge only: -- innovation will focus narrowly on improving routine work.
Pragmatic knowledge in addition: -- innovation will also focus on new ways of
performing function within constraint of present practices.
Systematic knowledge in addition: -- innovation may also include fundamentally different
ways of performing function with deep insights into how to change practices.
Idealistic knowledge in addition: -- innovation will include new perspectives and goals for
what is possible and how it may be achieved.
Resource Factors
Permission to use resources to experiment and explore.
Permission to spend time exploring and experimenting.

ON ADDING KNOWLEDGE
Adding new knowledge to what is already known is a very complicated and time-
consuming process, requiring the new knowledge to be internalized and all relevant
associations and connections to prior knowledge to be completed. New knowledge can be
generated in three basic ways by:
1. Acquiring existing knowledge from outside sources
2. Creating new knowledge by extending prior knowledge through reasoning and analysis
3. Creating new knowledge by exploring, experimenting, innovating, including serendipity
In all these cases, we obtain the new knowledge and internalize it by integrating it with what
is already known. We learn -- as individuals, as organizations, or as society. In very simple
cases, we can even let our computers “learn” without human intervention.
The creation of new knowledge is clearly important. Since the body of existing
knowledge is incredibly vast, it may often be impossible to locate relevant prior knowledge.
It may not be known where to find it, how to obtain it, and often it is not known that it even
exists. Hence a vast amount of relearning -- “reinventing the wheel” -- will always take place
and is actually important although it always requires expending undesirable efforts.

Acquire Knowledge from Outside Sources

As indicated, it is exceedingly and continually important to add new knowledge to what

we know. The moment a person, an organization, or even a product line stops receiving new
Learn! -- Create and Exchange Knowledge 185

knowledge, it stagnates and soon becomes a “thing of the past.” With all the knowledge that
already exists, the most important learning process for people is to acquire existing
knowledge from outside sources. This knowledge flow takes place whenever a person is
trained, educated, or actively acquires knowledge through reading, observation of experts, or
similar activities. Whenever someone designs a new office procedure or a different machine
part, these entities acquire -- passively -- existing knowledge from the people who create
them. Similarly, when designers build upon previous creations, they add new knowledge to
existing knowledge. As individuals, most of the knowledge we hold has been built by
receiving knowledge that already existed elsewhere.
On the other hand, when we learn by obtaining existing knowledge, we still receive it as
new experiences that we need to process to accept, assimilate, and organize. We have all
experienced this when we listen to a lecture on a professional topic we already are quite
familiar with. As we listen, we internalize the information we receive and suddenly we may
see new relations that pertain to some condition that we already are familiar with. “Aha!
That explains it!” we may say to ourselves.

Create New Knowledge Through Reasoning and Analysis

When we “mull over” a situation, what we just have learned, or what we already know
determines how it relates to other things that already are known, and we extend our
knowledge. We extrapolate prior knowledge by integrating and fitting it into new reflections.
That is, we come up with new understandings as a result of analyzing and discovering new
relations and connections. We all experience this when we reflect over how we may explain a
particular condition using what we already know. As we analyze the different aspects of the
condition, we suddenly see new relations that explain it and give new insights. In this
connection, it is interesting to note that generating new knowledge is very individualistic.
People with similar experiences and backgrounds may extend the newly acquired knowledge
in different, yet equally valid, directions and thereby create widely different knowledge items
and perspectives.
Formal analysis such as business analysis, technical fault analysis, or any other analysis
performed as part of normal knowledge work generally generates new insights and
knowledge. However, much of this knowledge tends to remain personal and tacit unless it is
codified and documented to make it available for others to use.
New knowledge may be created by simple deductive reasoning, through explicit logical
extension of declarative knowledge. More interestingly, we create new knowledge through
more complex forms of reasoning, such as inductive, abductive, or analogic reasoning,
extending what we know by more or less daring cognitive leaps. We also create valuable and
complex new knowledge using the complex reasoning approaches discussed in the next
chapter. The new knowledge may be highly reliable and correct, but at times it may also be
both suspect and wrong. Much of our knowledge of complex systems such as our
understanding of the social, political, and economic systems is generated by analysis using
186 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

complex reasoning approaches and is based on insufficient understanding of the underlying

processes. That may explain why we have so many “experts” who are brilliant people but
have very different and conflicting “knowledge” about these systems. Clearly, if their
knowledge is in diametric opposition, some of them must have faulty knowledge -- they must
be wrong!

CREATIVITY AND INNOVATION

The most valuable source of new knowledge in an organization may be the creativity and
innovation that individuals continually exhibit. “Innovation is everywhere, the problem is
learning from it.”1 People are very creative, very innovative, and full of ideas -- they innovate
constantly. As a result, we regularly create new knowledge whenever we discover new
understanding. For example, the personal innovation that results from exploring “how to
make life easier” (i.e., less painful and more pleasurable) produces never-ending learning
situations and is also one of the major sources for constant changes.
In the next two chapters we will discuss the role of reasoning in creativity and innovation
and what it means to be creative.

Explore, Experiment, and Innovate to Create New Knowledge

Most people explore and experiment, particularly when they think they can find ways to
make things easier or better for themselves. We also explore and experiment and find
ourselves in unknown situations where we have to improvise to create an approach that will
yield acceptable results. John Seely Brown sees individual innovation as a chaotic and
disorderly process. Although a problem, this is also a strength because it so frequently results
in novel approaches that almost can be considered serendipitous.
Frequently we have problems capturing our innovations. Since the innovation process is
disorderly, it can be very ineffective for learning, especially if -- as mostly happens -- we find
a good solution, use it for the present situation, and then promptly forget about it. This
happens often when we lack a good mental framework or model to fit the newfound approach
into. Unable to characterize it properly, therefore, we fail to capture its particulars and lose it.
The strength of individual innovation is that it is not pre-directed. We can allow ourselves
to be creative and innovate wherever we think it is appropriate and therefore, attack any
problem that may require improvement.

REPETITION IS REQUIRED TO GAIN PROFICIENCY!

To become proficient in any area, and at any conceptual knowledge level, requires that we
work repeatedly with the subject matter in question. We need to internalize new knowledge
by developing associations to prior knowledge -- or even revise it when it is outdated. Thus,

1 John Seely Brown (1991).

Learn! -- Create and Exchange Knowledge 187

we need to work repeatedly with any new subject to gain the level of understanding required
for the principles involved to become first systematic knowledge and, after more repetitions,
pragmatic knowledge and finally, after many, many more repetitions, automatic knowledge.
For example, it has been reported that to become proficient on the grandmaster level in a
complex body of knowledge such as chess, requires having played 10,000 or more games!
Repeated exposure is required, even in what we think of as simple matters. A master
electrical engineer once told that after working for over ten years with design of electronic
circuits: “I finally think that I start to understand Ohm’s law!” This anecdotal statement
reflects many experts’ experience and is very telling. It points to the increasingly deepening
understanding that experts gain when they continually build broader associations with
additional factors that an advanced beginner may not even know exist and a competent
performer is just beginning to learn about.
We see a similar requirement for “drilling” and repeated exposures when an organization
needs to learn new materials or procedures to attain proficiency. Repeated use of the new
material is required by many people to make the organization able to use new approaches
proficiently. The need for repetition is costly -- first for training, and later for less than
perfect performance while people still are learning. This is one basic reason why
manufacturing firms, for example, will perform pilot runs to learn how to operate a new
process. Service organizations will train new employees with simulated customer calls.
Airlines will let pilots spend hour after hour in flight simulators. In short: Repetition is
required to attain dependable, automatic behavior -- repeated training leads to automatic
knowledge which in turn leads to consistent behavior.

Lack of Repetition Is Often the Scourge of Training Programs

There often are problems with training programs and education. Due to limited time
budgets, we tend to present too much material in too little time. In addition, we often
overload people with factual knowledge -- to the extent that we may exceed their mental
capacity for retaining the material.
Materials are presented only once -- and often quickly -- with the result that if retained at
all, the contents may only be retained as idealistic knowledge that may help to set goals but
cannot be used “on the fly” in real-life situations. The material is not “connected” to prior
knowledge -- associations are not built and the material is not internalized. In effect, much of
this material is remembered as factual knowledge, perhaps with selected concepts
remembered, but not integrated in ways that allow expectations and judgments to be built.
Often, this material is easily forgotten.
188 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Some Basics on Learning and Knowledge Flows

When we wish to obtain overview of how best to learn and when to introduce learning in
our organizations, we need to create a reference framework. This section provides some of
the established perspectives that are relevant to our efforts. Learning, the process of capturing
and internalizing new knowledge, is perhaps the most complex knowledge-related mechanism
we encounter and, therefore, we wish to understand it quite well.

KNOWLEDGE FLOWS AND LEARNING

Whenever we transfer existing knowledge from one party to another, we think of it as

learning. Knowledge flows from the source to the learner. The receiving party can be a
person, an organization, even a machine. The knowledge source can be another person, a
“teaching machine,” books or other codified material that holds explicit knowledge, or it can
be a situation that provides a learning opportunity.

Learning Theory Perspective

Mechanisms and approaches to learning have been explored throughout historic times. In
recent years a formal learning theory has emerged to provide us with a framework to
understand learning. Learning theory postulates that all learning models consist of four
principal parts: (a) a class of languages or structured means of communication, one part of
which is “target of learning” (material to be transferred); (b) the learning environment that
provides knowledge material to the learner; (c) a learning strategy that maps new knowledge
material onto hypotheses based on prior knowledge; and (d) a success criterion that defines
acceptability and correspondence between the learner’s conjectures and the learned material.
A simple learning model according to this theory is illustrated in Figure 6-3.
In this figure, the basic learning model is depicted as a one-way communication from the
knowledge source to the learner. In most situations, however, the knowledge source receives
feedback from the learner on a variety of issues: Is the communication understood? Is the
representation acceptable? Is the communicated knowledge appropriate, and so on. In
addition, most learning processes include a much more complex process to verify and
determine the relevance of the presented knowledge.
According to a different perspective learning, in general, can be seen as taking place in
the following simplified way:
• Material is received by the learner and is perceived to include new elements of knowledge.
• The new elements are examined for relevance and potential correctness or falseness and
are accepted or rejected (in the case of uncritical learning, new knowledge is accepted
Learn! -- Create and Exchange Knowledge 189

without examination). Particular considerations at this point include:

-- Is the knowledge relevant?
-- Can it be assimilated directly?
-- Does the new knowledge differ from prior knowledge in ways that require
modification of the prior knowledge and existing mental models (paradigms, schemas,
decision rules, and so on.)
• The new knowledge elements are internalized by the learner by codifying, representing,
and organizing them according to prior -- or at times new and contextual -- categorization
systems and mental structures. The learner continues to connect the new knowledge
through associations and abstractions in forms similar to concept hierarchies and concept
relationships. After the knowledge is received, new associations are formed and
categorization systems are changed. When the new knowledge requires that prior
knowledge be modified, the result is often lengthy and complex reorganization and even
discarding of some of the prior knowledge.

Figure 6-3. Illustration of a Simplified Learning Model.

Communicated
Knowledge
in Acceptable
Representation
(Language)
Hypotheses

Language Compare New Is New Prior

Source Knowledge Yes
Knowledge or Structured Knowledge (Cumulated)
Representation to Prior Acceptable? Accept Knowledge
Hypotheses &
Integrate
No with Prior
(Reject) Knowledge

Knowledge Source Learner - Knowledge Recipient

Five Stages of Learning

Researchers have established that our learning progresses through five distinct stages
when we encounter new material:
Stage 1. Perception and comprehension of the knowledge
Stage 2. Maintenance of the knowledge in working memory until long-term registration
occurs
Stage 3. Registration of the knowledge in long-term store
Stage 4. Maintenance of the knowledge in long-term store
190 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Stage 5. Retrieval of knowledge from storage when the information is needed1

This model differs (in Stage 2) from the notion that working memory has a very small
capacity and a short retention time and that, therefore, the material is held in a medium-term
buffer memory. (This notion was introduced in Chapter 3 to explain how recently used
mental objects are held for hours or days.) In Stage 4, the “maintenance of the knowledge”
includes the very complex processes of internalizing new knowledge as we discuss it in this
chapter.

Seven Basic Learning Strategies

A number of basic types of learning strategies have been proposed, many of them closely
related to the different types of reasoning that are discussed in the next chapter. Two basic
learning strategies involve quite straightforward learning:
1. Rote Learning or Direct Implanting of Knowledge is an extreme case where the
learner accepts the knowledge supplied without examination, judgment, or questioning. It
is accepted directly by the learner. Rote learning includes direct memorization of the
provided facts or concepts. In direct “implanting learning,” knowledge is “copied”
directly into memory without modification or extension.
Rote learning is often used to train (in contrast to “educate”) and pertains particularly
to communication of pragmatic and automatic knowledge.
2. Learning by Instruction (Learning by Being Told) takes place when a teacher or other
source of organized knowledge provides material to the learner who then selects the most
relevant facts or transforms the presented knowledge into more useful forms.
Learning by instruction is also often used to train rather than educate. An example is
when a learner is presented with basic facts of how to maintain a particular machine and
translates that into a personal frame of reference. It pertains particularly to
communication of pragmatic and automatic knowledge.
More powerful learning strategies are based on analysis of the material presented or
situations whereby learning results from considering the analysis results to provide new
knowledge. These strategies are particularly useful for education and for communicating
idealistic and systematic knowledge. Some of these strategies are:
3. Learning by Deduction is a more complex process where the communicated material
contains the subject knowledge implicitly. That is, the learner deduces knowledge from
the presented material.
A simple example of deduction learning is when a person is presented with the
declarations about facts that expenses exceeded income in the last quarter and then
deduces as new knowledge that the corporation operated with a negative cashflow during
the period.
4. Learning by Induction is a strategy where the learner acquires knowledge by drawing
inductive inferences from the supplied material.
An example of induction learning is when one infers and accepts as new knowledge

1 Reported by A. T. Welford (1985). Welford uses the term “information” to denote what we call
knowledge.
Learn! -- Create and Exchange Knowledge 191

that a particular competitor’s strategy is to reduce prices sharply to win bids in

competitive situations after having been presented with material indicating that in the last
two cases he slashed prices when faced with competitive bids.
5. Learning by Analogy makes the learner create new knowledge by modifying specifics of
a previously known concept to match the presented material. Learning by analogy is
considered to be a combination of deductive and inductive learning.
For example, if the learner knows the concept of “bank loan,” s/he can learn the
concept of “mortgage” by noting the similarities and distinctions between the two by (a)
using inductive inference to determine general characteristics and common features; and
(b) using deductive inference to identify the expected characteristics of the new concept
“mortgage.”
6. Learning from Examples is when a learner induces a new concept by generalizing from
the provided examples, and possibly counterexamples. Learning from examples is one
kind of learning by induction. In particular, it often involves application of case-based
reasoning.
An example of learning from examples is when an expert shows a loan application to
an apprentice, commenting: “This is an example of a sound loan prospect with a good
track record, good management, and strong market. Note how it differs from the start-up
company we looked at yesterday that has a good management team but no established
market and operating history.”
7. Learning by Observation and Discovery (Unsupervised Learning) is when a learner
analyzes observed or presented entities in the provided material and determines that some
can be classified into a preexisting or new organizational or representational structure that
can characterize or even explain the material. Learning by observation and discovery is
another kind of learning by induction. It can employ sub-strategies like clustering or
descriptive generalization.
An example of clustering is when a learner observes that the material represents a new
variant of life insurance policy and immediately classifies the new policy in her general
concept hierarchy for policies with all their characteristics and special conditions.
An example of descriptive generalization is when a learner observes that several
customers prefer to be supplied with products before noon and infers as new knowledge
that “most prefer to be resupplied in the morning.”

Knowledge Flows

From an organizational perspective we distinguish between four general knowledge flow

dimensions. We have chosen here to categorize them by the nature of the end-use of the
knowledge as it supports four of the knowledge workers’ functional roles. The four
knowledge flow dimensions are:1
Dimension 1. Do the Job! -- Apply available knowledge to make quality products and
services.

1 The four knowledge flow dimensions presented here are influenced by Dr. Deming’s
fourteen points for management, Deming (1982). Further discussion of knowledge flows is
provided in Knowledge Management Methods: Practical Approaches to Manage Knowledge, Wiig
(1995).
192 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Dimension 2. Do the job better! -- Learn. Bring new operational knowledge to knowledge
workers to permit them to perform their tasks better.
Dimension 3. Improve the work function! -- Learn and apply knowledge to change the
system of production and service.
Dimension 4. Improve the products! -- Learn, build, organize, and apply knowledge to
change and improve products and services and create new ones.
Figure 6-4 illustrates the four knowledge flow dimensions schematically. The major focus
of the knowledge flows is to identify what knowledge workers need to learn to produce the
highest value work possible. The figure also shows ancillary but important knowledge flows
such as the flow of knowledge from “learn to renew products and services” (the rightmost
rectangle) to “untouched work objects.” This knowledge flow provides expertise to redesign
work objects upstream to make it possible to improve the value of products from the “work
function.”
One such example is when an insurance underwriter provides knowledge about a more
efficient data collection form or method for field representatives and explains how it can be
redesigned to obtain better data, to introduce less errors, and to require shorter underwriting
time. Additionally, the underwriter could also suggest how the field representative could
make some decisions on-site to advance the process and make the underwriter’s work more
effective and accurate.

Figure 6-4. Overview of the Four Knowledge Flow Dimensions.

Untouched
Work
Objects Build
Build Knowledge
Knowledge of
Build of Customers
Apply Knowledge Process & Work
Work Knowledge Markets
Target to Environment Technologies
Object(s) to Make Learn to to
Work & Tasks Products & Competitors
Function Perform Learn to to
Services Tasks Work Smarter Learn to
Better by Renew
Improving Products
Finished Work &
Products Function Services
&
Services

Knowledge Flows
Information Flows
Work Flows
Learn! -- Create and Exchange Knowledge 193

Organizations Need to Learn Too!1

All organizations are operated to ensure that they are successful and attain their operating
objectives to the largest extent possible. Frequently, that means that they need to be better
than their competitors and must maintain or increase their financial and market positions as
the world around them changes. To fulfill these expectations, companies constantly need to
change and improve. They constantly need to learn -- from their own experiences, from
research, from observations of what others do, and from any available source. In addition,
they must exploit what they learn to make sure the new knowledge is made available to all
relevant points-of-use in a timely fashion and with ease.
To change, organizations must put to use what they learn and not forget the valuable
lessons. Only when they systematically pursue and are successful in all these activities can
companies be successful. Or, in the words of a noted business analyst and commentator:
“For any organization to survive and have a chance of growing, its rate of learning has to
be equal to, or greater than, the rate of change in its external environment.”2
To learn and put to use what has been learned, on both personal and organizational levels,
requires considerable energy, organization, and methods for approaching these tasks. It will
also require change and adoption of new perspectives by many individuals and management
teams. Some companies are very organized in their approach to learning.

Example of an Aggressive Learning Organization

An aggressive service company in the United States works hard to stay ahead of its
competitors. To achieve this objective, its managers deliberately wish everyone to learn as
much as they can about its customers, its competitors, the effectiveness and performance of its
products and services, what can be expected in the future, and everything else that may be of
importance. As a result, the company makes available what has been learned to everybody
who can use this knowledge and provides incentives to ascertain that it is put to good use.
Consistent with this approach, the company has adopted formal perspectives of what they
need to learn; how they wish to learn it; what they already know, how well suited and
organized that knowledge is; who has the knowledge; where the knowledge is needed; and
how to get it there. The company has implemented an impressive training program to
distribute the knowledge to all who can use it profitably. Every employee spends one half day
every week learning -- an impressive 10% of their total work time! -- in formal training or in
anyone of many other knowledge building activities. Education and training occurs at several

1 A discussion of the learning organization is provided in Knowledge Management: The

Central Management Focus for the Intelligent Organization,
Wiig (1994).
2 Garratt (1990), p. xiv.
194 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

levels. On the most basic level, knowledge about jobs (i.e., task execution, products, services,
and so on) is taught to knowledge workers. It is also continually codified and updated into
training program formats to provide employees with the latest skills to perform their functions
proficiently. On a higher level, employees are provided with education to learn broader
aspects and underlying principles of such areas as their industry and how to deal with people
and the world in general. On yet a higher level, all must participate in special programs that
provide insights into “knowledge about knowledge,” that is, they learn how to view the
knowledge they have and how they should use it, how to organize what they learn, how to
learn on-the-job, techniques for problem-solving, and so on. They are taught both theoretical
concepts and practical methods for these areas.
On a different level, the company works to ascertain that the knowledge is used. It
provides incentives to facilitate use of the best and most advanced knowledge available.
Further, it embeds what is learned in the design of its products and services and incorporates
selected aspects of what has been learned into its systems and procedures in ways that allow
relatively quick updating when required. The company strongly promotes the notion that
“Excellent knowledge that is not used is worthless knowledge.” The company has achieved a
reputation for having the most responsive, cooperative, and knowledgeable service
representatives in its business. Besides, it is recognized for being very flexible in its response
to customers and for having the most up-to-date and best performing products and services
within the industry. The company is very profitable and is also dominant in its market.

Different Learning Processes

Many different learning processes need to be considered for the learning organization.
Clearly, the most important learning processes relate to making people more knowledgeable --
building knowledge in individuals -- and providing personal access to knowledge to facilitate
better decisions, judgments, and overall knowledge work. But, as discussed, knowledge is
built and manifested in many other ways beyond knowledge in people. Hence, improving the
quality of knowledge in those manifestations is also an important learning process. Some of
the ways organizations “learn” and build knowledge are shown in Table 6-2, which lists
methods and purposes for a few organizational knowledge-building processes.

ORGANIZATIONS LEARN BY TRANSLATING EXPERIENCES INTO REFERENCE

CASES -- DOCUMENT “LESSONS-LEARNED”!

One successful approach to building organizational knowledge is the translation of

important experiences into reference cases expressed in appropriate representations. Many
organizations use this approach to capture lessons-learned and other important experience
knowledge. For example, they use it to characterize equipment failure scenarios to provide
future support for service requests. The approach is also used for many other purposes where
 Learn! -- Create and Exchange Knowledge 195

the knowledge can be represented in a reference case or story form, often in free-form natural
language. Frequently, computer implementations based on implementation of case-based
reasoning are used to support knowledge workers when they need help with unusual or
difficult challenges. Given the challenge at hand, the system identifies and presents
appropriate cases based on the information provided and then presents recommendations for
how to handle the challenge.

Table 6-2. Examples of How Organizations Learn and Build Knowledge.

Method of Knowledge Building Purpose of Knowledge Building
Build Knowledge in People
Train People Transfer Skills & Know-How to Perform Tasks
Educate People Transfer Basic Knowledge & Understanding
Learn On-the-Job - 1 Improve Ways of Performing the Task
Learn On-the-Job - 2 Improve Ways of Redesigning the Task
Hire Knowledgeable People Obtain Knowledge That Is Missing or Sparse
Build Knowledge in Repositories Outside People
Capture & Codify Lessons-Learned Learn from Past Successes & Failures
Document Knowledge in Manuals Codify & Distribute How-to Expertise
Document Knowledge in Books & Articles Codify Basic & How-to Expertise
Build Knowledge Bases Codify & Archive How-to Expertise
Perform Research & Document Results Create New Basic & How-to Knowledge
Improve Corporate Culture Spread & Institutionalize Knowledge
Improve Corporate Structure Reflect & Preserve Management Knowledge
Build Knowledge-Based Systems Codify, Distribute, & Automate How-to Expertise
Build Knowledge by Embedding
Embed Knowledge in Technology Improve Technology & the Way It Is Used
Embed Knowledge in Standards Improve Standard Technology Solutions
Embed Knowledge in Operating Practices Spread Better Ways of Operating to All
Embed Knowledge in Organization Structure Facilitate Operations Based on Experience
Embed Knowledge in Systems & Procedures Ease & Require Use of Better Methods
Embed Knowledge in Products & Services Improve Products & Services

An outline of a typical process is shown in Figure 6-5 where there has been an unusual or
memorable experience as indicated on the left. After the experience has taken place, there is
an emerging understanding leading to a loose concept -- or story -- of what the situation was
all about. It is later (the sooner, the better) represented in a format suitable to be stored in a
repository such as a computer-based knowledge base.
When knowledge embedded within a reference case is needed, it may be requested by a
knowledge worker to an automated case-based reasoning system that matches the description
of the challenge situation to the available cases (that is the process indicated in the figure) and
produces the appropriate recommendation.
196 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Figure 6-5. Organization Learns to Use Knowledge from Memorable Experiences.

Search for Cases Request for Knowledge
Loose Passive Active
Data Concept Information Knowledge Knowledge
Unusual Emerging Representing Reference Case Case Based Use Knowledge
or Understanding Experience as Repository Reasoning to
Memorable of What Is Reference (Library) Capability Deliver Services
Experience Happening Case (Knowl. Base) & Make Products

Several organizations refer to their process of capturing significant experiences and library
of reference cases as their “Corporate Memory System” and consider it a major step towards
building corporate knowledge assets. They do find, however, that most of their people find it
difficult to author the reference cases and that it requires specific mind-sets to identify the
characteristics that best classify the various types of experiences.

Personal Learning -- Build Knowledge in People

When we learn, we cumulate, internalize, and organize knowledge in our minds. We
build knowledge. People learn in a number of ways. We build knowledge through education,
self-study, learn from others, organizing information obtained in different contexts such as
research and development programs, through innovation, or even by extending prior
knowledge that they possess into new areas by inductive, abductive, or associative reasoning.
Although knowledge is typically thought of as internal, personal knowledge, it can come as
external knowledge embedded in systems, procedures, company traditions, practices, and
folklore; as knowledge built into products and services; and as codified knowledge in reports,
scientific publications, and many other forms. Of particular importance in the present context
is internal knowledge built in, and by, people -- the subject of this section.
Learning can be a personal experience where we learn new things that we add to our
knowledge base. However, learning, can also be considered in wider contexts. For example,
we think of having a number of people build experience and learn new things and having
some of the knowledge codified and documented as “we have learned,” where “we” may refer
to a small group of people, a company, a nation, or even mankind. We think about how
organizations learn by building new knowledge in its personnel, its systems and procedures,
its traditions, its technology and infrastructure, and its products and services. These different
modes of building knowledge were implied in Figure 1-1 and are discussed further in
Knowledge Management in the chapter on “The Learning Organization.”1
When we consider how individuals learn, we need to distinguish between the different
learning processes and the different kinds of knowledge that we want to learn. As we

1 Wiig (1994).
Learn! -- Create and Exchange Knowledge 197

identified earlier, there is considerable difference between skill and knowledge. We use skill
to perform routine work without deep understanding and broad background knowledge, but
require deep knowledge in addition to skill to perform advanced work. We also need to
understand the differences between the various knowledge-building processes we use to
increase our skills and knowledge. These processes have different emphases and produce
quite different results and deliverables; therefore, they need to be used for different purposes.
In general, when we transfer skills to a person, we say that we are training that person.
Further, when we train, we tend to focus on transferring pragmatic and automatic knowledge.
By comparison, when we transfer knowledge and deeper understanding to a person, we think
of that as educating the person -- we focus on transferring idealistic and systematic
knowledge. Many learning mechanisms need to be taken into account, ranging from self-
learning to formal educational classroom settings, from learning on-the-job to computer-
aided-instruction (CAI), and so forth.

Transfer Knowledge Between People

We often talk about “information transfer” or “technology transfer” from one person to
another or from one organization to another. Our concern in most of these cases is transfer of
knowledge and expertise between people. We are not only interested here in transferring facts
and data that are structured and organized with specific interpretations and uses in mind, we
are also interested in transferring specific particulars and skills for performing a number of
routine tasks in terms of pragmatic and some automatic knowledge. We are also interested in
transferring underlying principles and background knowledge, particularly as systematic
knowledge to enable a knowledge worker to handle nonroutine and more general tasks.
Finally, we are interested in communicating insights, perspectives, understandings,
categorization systems, judgments, approaches, methodologies, and other knowledge objects
from a knowledgeable person to other individuals who have a need to know. In reality, we
are also interested in transferring idealistic knowledge, although that often does not receive
much emphasis.
Knowledge transfer can take place in many settings. It can take place in formal
classrooms or less structured seminars. It can take place when people work together over
longer periods of time in apprenticing situations with competent performers or experts. It can
even take place electronically in consultation modes using electronic mail and telephones.
Public knowledge is routinely transferred through education. In dealing with transfer of
knowledge between people, however, the type of knowledge that we primarily seek to transfer
is often “shared expertise.” Unfortunately, this is not quickly and easily shared. The expert
and the learner must share a considerable amount of background knowledge before sharing of
expert knowledge can take place effectively. Specifically, understanding the expert
knowledge requires understanding the “language” and much of the general theory from public
knowledge. Consequently, the recipient must first acquire these areas.
198 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

PEOPLE HAVE DIFFERENT LEARNING STYLES

As people, we have markedly different learning styles, which are reflected in our innate
aptitudes, our school grades, and our job performances. When considering how we manage
knowledge -- and manage the people who build, hold, and apply knowledge -- we need to take
into account the different learning styles and their associated strengths and weaknesses. Since
human learning is very complex, it is helpful to view learning styles in several different ways.
A major perspective involves the way we process new situations. From this perspective
we encounter two styles:1
• Sensors/Feelers who tend to “feel” their way and characterize what they observe as
concretely as possible. They are active.
• Thinkers who tend to think through new situations and characterize what they observe
and conclude quite abstractly. They are passive.
A second major perspective involves the way experiences and situations are perceived as
they are encountered. Again we find two styles:
• Watchers who tend to be reflective and stand back when they encounter a new situation.
They are hands-off.
• Doers who prefer to engage themselves actively in new situations and participate in them.
They are hands-on.
The relationship between these four basic learning styles is illustrated in Table 6-2 with
additional labels identified by Kolb.2
The third perspective is slightly more detailed as it classifies types of learners by
combining how we perceive and process new situations:
• Innovative Learners or Divergers who perceive new situations reflectively while
processing them concretely (corresponds to sensors/feelers who also are watchers).

Table 6-2. People Have Four Basic Learning Styles.

Active Passive
Sensors/Feelers Thinkers

Hands-Off Innovative Learners Analytical Learners

Watchers or or
Divergers Assimilators

Hands-On Dynamic Learners Common Sense Learners

Doers or or
Accommodators Convergers

1 These characterizations are adapted from B. McCarthy (1981) The 4 MAT System.
McCarthy also identifies “Innovative Learners,” “Analytical Learners,” “Common Sense
Learners,” and “Dynamic Learners”.
2 Kolb, 1984 identifies “Divergers,” Assimilators,” “Convergers,” and “Accommodators.”
Learn! -- Create and Exchange Knowledge 199

Teaching Method: Discussion

Process: Integrating new experiences with existing knowledge
Incentive: Giving and obtaining reasons for need to learn
Behaviors: Interaction
Strengths: Can generate practical knowledge from abstract knowledge
(particularly pragmatic from systematic knowledge)
Weaknesses: May create concrete approaches that are idealized and
impractical
• Analytical Learners or Assimilators who perceive new situations reflectively while
processing them abstractly (corresponds to watchers who also are thinkers).
Teaching Method: Provide information, primarily by providing idealistic and
systematic knowledge
Process: Form new concepts as the new situations are assimilated
Incentive: Concerns for facts
Behaviors: Teacher needs to be active
Strengths: Can create valuable theoretical insights
Weaknesses: Are not very practical
• Common Sense Learners or Convergers who process new situations abstractly while
perceiving them actively (corresponds to doers who also are thinkers).
Teaching Method: Coaching
Process: Learner practices while internalizing new knowledge
Incentive: Wishes to try while learning the new situation
Behaviors: Student acts and reacts
Strengths: Generate abstract knowledge from practical experiences
Weaknesses: May have problems assimilating theoretical education and
abstract information
• Dynamic Learners or Accommodators who process new situations concretely while
perceiving them actively (corresponds to doers who also are sensors/feelers).
Teaching Method: Self-discovery and peer teaching
Process: Integrates application and experience while learning
Incentive: Self-motivated to learn
Behaviors: Self-generated student-teacher interaction

Strengths: Learns new skills quickly (particularly pragmatic and automatic

knowledge)
Weaknesses: May not be good at acquiring and integrating underlying
understanding (particularly idealistic and systematic knowledge)
Each of the four learning styles described above has both strengths and weaknesses.
However, we do not always treat people equally according to their basic capabilities. For
example, schools and universities tend to favor the analytical learner (assimilator) style even
though only about 30% of people behave according to this style. That leaves the majority of
us at a disadvantage in the formal ranking system established by our academic
achievements and often gives a false perspective of a person’s abilities to perform in real-
life situations.
200 Knowledge Management Foundations:
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It is important that we as managers are aware of these differences. Just because a person
is an analytical learner and have achieved good grades in school does not mean that s/he is
well suited to perform a critical intellectual function in the organization. A good design
engineer, for example, may be better drawn from the “common sense” learners, while a store
manager might be better if she is a dynamic learner.
When we force a person to learn in a mode that is at odds with his or her learning style,
the result is a much reduced learning efficiency. In fact, some may not be able to learn at all
under these circumstances. It is important, therefore, to match the chosen learning process
with the person’s learning style.
Easy-to-use tests and survey methods now exist to establish people’s learning styles. Use
of these tools simplifies identification of an employee’s style and makes it possible to match
the training and educational opportunities with the person’s style.

DIFFERENT KNOWLEDGE-CREATION AND LEARNING PROCESSES

Personal learning in a company takes place in different ways. People can attend formal
educational programs, they can participate in training programs, or they can learn as part of
their work -- learn on-the-job -- in addition to many other forms of less formal learning. In
Figure 6-6, we provide an idealized perspective of how personal learning takes place. We
distinguish between education, training, and learning on-the-job. Further, we distinguish
knowledge from skills to show that knowledge provides the capability to perform advanced
work while skills are used mostly to perform routine work.
An important aspect of learning is the ability of a person to learn, generalize, and apply
knowledge as indicated in Figure 6-6. In order to build knowledge, a person must be able to
learn and generalize, while to build skills, the need to generalize is lessened. To build skill
from general knowledge one must be able to apply knowledge, and to build knowledge from
skills it is necessary to generalize. A person’s overall proficiency provides these abilities as
well as the abilities to perform routine and advanced work.
A different view of personal knowledge-building processes is shown in Table 6-3, which
presents ten common approaches. We have placed the transfer of existing knowledge from
external sources into one category and knowledge building by creating new knowledge into a
second category. For each approach, the results normally expected in terms of emphasis and
type of knowledge obtained are indicated.
Learn! -- Create and Exchange Knowledge 201

Figure 6-6. Idealized Perspective of Personal Learning Processes Under Various

Conditions and for Different Purposes.
Knowledge That Exists Elsewhere

Educate Train Learn

On-the-Job

Ability to Ability to Ability to

Learn & Learn & Learn &
Generalize Generalize Generalize

Ability to Ability to
Learn Learn

Ability to
Apply
Knowledge Skills
Ability to
Generalize

Overall Perform Perform

Routine
Proficiency Advanced
Work
Work
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Personal Knowledge-Building Processes

Table 6-3. Some Common Personal Knowledge Building Processes.

Knowledge-Building Process Results Normally Expected
Receive Existing Knowledge from External Sources
Formal Education Broad, deep, & well-balanced understanding
& knowledge of the area under study
Emphasis is more on theory than practice
------- -------
Formal Training Skills & some theoretical understanding
of how to perform a task.
Emphasis is more on practice than theory.
------- -------
Reading Books Depending on the selection of the books, the quality of
knowledge may be excellent & at great depth.
Emphasis is almost exclusively on theory.
------- -------
Receiving Knowledge & Information Often arbitrary coverage with limited
Presented Through the Media. control of the quality & depth
of the knowledge & information presented.
------- -------
Obtaining Intelligence from Can be highly targeted. Is often highly pertinent
Friends, Coworkers, or to current contexts. Emphasizes “what-is” surface
Formal Company Channels phenomena rather than underlying understanding.
------- -------
Computer-Based Normally highly targeted to specific knowledge areas.
Multimedia Costly to change &, therefore, inflexible.
Education & Training Very effective.
Create New Knowledge
On-the-Job Learning Skills in actually performing the job. There may
be little emphasis on deep understanding & theory.
If unsupervised or not provided with good understanding
of prior knowledge, significant misconceptions may result.
------- -------
Learning through Personal Experiences Very wide-ranging & potentially deep.
May provide arbitrary coverage instead of well balanced
understanding. Significant misconceptions may result.
------- -------
Conducting Research Reliable & valuable new discoveries based on
“all that is previously known.”
Results codified to be made accessible for others to use.
------- -------
Personal Innovation Small & large improvements, mostly within areas of
Learn! -- Create and Exchange Knowledge 203

personal work; with narrow scope. Frequently held as

“personal knowledge,” not widely shared, & later lost.

Traditionally, the most relied-upon knowledge-building processes have been on-the-job

training and classroom education and training. This may be appropriate since these learning
modes are efficient (relatively low cost) and provide relatively good opportunities for
controlling the quality of the process.
However, many other knowledge-building activities are relevant and must be considered
by managers and knowledge workers when exploring opportunities for building knowledge
for themselves, others, and their organization. The most important attributes that should be
sought in any knowledge building process are breadth of coverage, balance and homogeneity
of coverage (to avoid “holes” and important areas of lack of knowledge), quality and
correctness of knowledge, and emphasis on theory or practical insights.
There is considerable room for innovation and creativity in devising effective knowledge
building-processes, and we constantly see the emergence of new and more powerful
approaches. Some of these are based on automated computer-based systems providing
powerful simulations or exploratory browsing approaches, others are solely based on human
interaction formats such as those that may cycle between group instruction, individual
instruction, and hands-on practice. It appears that personal learning and capturing of new
knowledge from ad-hoc personal innovation is often underestimated as significant and
valuable knowledge flows and, therefore, need to be exploited to a much larger extent.
Whereas the formal classroom educational process on the surface may appear similar
throughout any school or university, there is enormous diversity in the quality of education
provided. Such diversity is primarily due to the teacher’s creativity and ability to innovate.
At the same time, however, it is to some extent due to the content of the curriculum and the
learning materials.
Students who are provided first with idealistic and then systematic knowledge,
interspersed with short real-life examples (automatic knowledge) and later with gradually
increasing pragmatic knowledge receive a very good understanding of the domain. They end
up with a much better grasp and useful understanding of the subject matter than those who are
provided with pragmatic knowledge first followed by some systematic knowledge as
“required” and little or no idealistic knowledge.

Top-Down Learning -- Schema, Script, Routine, and Event Learning

A different model of personal learning is based on our concepts of schemas, scripts,

routines, and events. Based on these concepts, top-down learning may be illustrated as in
Figure 6-6. In a top-down learning situation a person initially learns about basic principles
from idealistic and abstract perspectives. As learning progresses and these principles are
internalized, the person
204 Knowledge Management Foundations:
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Figure 6-6. Personal Learning Top-Down from First Principles Theory.

Rudimentary Developing Proficient In-Depth

BASIC Theoretical Theoretical Theoretical Theoretical
THEORY Understanding Understanding Understanding Understanding

SCHEMAS Emerging Developed

Schema Schema

Initial Improved Excellent

SCRIPTS Script Script Script

Rudimentary Simple Good Routine

Routine Routine
ROUTINES Event
Event
Event

Event Event
Event

EVENTS
Observe Observe Observe
Events Further Even More

develops an emerging schema. At the same time, most effective learning situations allow
observation of, and sometimes participation in, events that are related to or supportive of the
target area. Given such inputs, the person starts to develop initial scripts and rudimentary
routines.
Idealistic knowledge obtained during the first learning stages is augmented with
systematic knowledge and understanding of the general principles and what determines and
guides the domain. When learning becomes more practical, pragmatic knowledge starts to be
developed by understanding of how to use the systematic and idealistic knowledge. Through
continued exposure, on-the-job or to other types of training, knowledge is automated and
automatic knowledge, or skills, is developed. As exposure to the subject matter continues,
theoretical understanding, schema, scripts, and routines are continually developed and
expanded. During this process, the person changes from being a neophyte to performer, and
later to expert, and finally to master.

Bottom-Up Learning -- Event, Routine, Script, and Schema Learning

When learning bottom-up, we initially observe individual events as isolated occurrences

without links to any framework, as indicated in Figure 6-7. If the exposure to many similar
events is extensive, the person may be able to form some automatic knowledge, often without
Learn! -- Create and Exchange Knowledge 205

understanding the underlying principles -- and may become able to handle events of certain
narrow categories. However, from such exposure, s/he will not have developed a capability to
handle variations from these prototypical situations. When the observed events or situations
are drawn from a broader set of events and situations, the person will be able to develop and
recognize patterns and generalizations that soon form into initial scripts and later into more
abstract emerging schemas.

Figure 6-7. Example of a Bottom-Up Personal Learning Process.

SCHEMA Emerging Developed

Schema Schema

Initial Improved Excellent

SCRIPT Script Script Script

Event Event
Event
Continued
EVENT Observations
Observe Observe Observe
Events Further Even More

Rudimentary Simple Good Routine Excellent

Routine Routine Event
Routine
ROUTINE Event
Event Event
Event

If the person is actively and repeatedly involved in the events in some way, s/he will start
to develop routines to cope with new events and situations and form broad automatic
knowledge. As further observation or participation takes place, increasingly refined routines,
scripts, and schemas are developed and the body of automatic knowledge is continually
expanded. In addition, it is during this process that the person develops and invents
pragmatic knowledge, and later to start developing “homespun” systematic and idealistic
knowledge which, as indicated above, may not always be reliable.
Bottom-up personal learning situations are personal discovery processes that suffer
from considerable limitations. For example, the knowledge that is created may be
independent of -- disconnected from -- existing bodies of knowledge and hence result in
merely “reinventing the wheel.” Worse, the knowledge may be based in part on inappropriate
perceptions and on propagation of prior misconceptions and, therefore, result in false and
wrong knowledge.
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BUILDING AND INTERNALIZING PERSONAL KNOWLEDGE

According to epistemological philosophers and cognitive scientists, internal knowledge is
built through a number of processes. Considering that a person’s knowledge can be defined
as “that which is believed to be true” by the person, ideally, this means that for a new segment
of knowledge to be accepted, it must be internalized by the person and incorporated as
acceptable and in concert with prior knowledge.
As discussed earlier, internalization is a gradual, complicated thinking and reflection
process that involves making new knowledge congruent with prior knowledge. This
eliminates any conflict between facts, concepts, and so on, which could interfere with the
believability of any parts of the knowledge. Internalization also includes building new
associations, new chunking hierarchies, and organizing the new knowledge from a number of
different perspectives. Few, if any, have totally conflict-free knowledge. We all possess
knowledge areas that are incongruent, some may even be totally contradictory of knowledge
in other areas!
In order to internalize new knowledge, it is necessary to (a) accumulate new facts or
mental models of causal chains; (b) form new concepts and perspectives and modify old ones;
and (c) add new judgments and expectations or revise old ones. In addition, it is at times
necessary to discard old knowledge that is found no longer to be true or correct as it conflicts
with more believable, newer knowledge. Some of the reasoning approaches associated with
these mental processes are discussed in the next chapter.

Changing Beliefs Is Not Always Easy

For many people, revising and discarding knowledge and old beliefs is painful and
unpleasant. For others, it is much more acceptable. For a few, the process of updating and
modifying their personal knowledge is considered an enjoyable discovery journey that allows
them to satisfy their curiosity.
When building new personal knowledge, several perspectives must be kept in mind. From
the perspective of on-the-job knowledge building and adding new situations and evidence
may be added to prior knowledge -- which is already known and believed -- the following
conditions occur:
a. Confirming and sharpening what already is known. This is the case when the
observed situation is of a known type. In this case, there is no new fundamental
understanding to be gained. However, other knowledge may be gained. Such knowledge
is associated with confirming existing knowledge, adjusting expectations for when and
how often this type of situation may be encountered, and improving an understanding of
what the efficacies for different ways of handling the situation. Most people have few
problems with learning this kind of knowledge.
b. Adding to what already is known. We can add knowledge when the situation that is
presented is a new, previously unknown type that the person has little understanding of
Learn! -- Create and Exchange Knowledge 207

and that does not contradict what is already known. In this case, the situation is outside
the person’s recognized knowledge domain. Learning about and understanding this new
situation and the principles behind it offers an opportunity to augment the knowledge that
s/he already has without significant revisions of existing knowledge. This new knowledge
must be integrated with what is already known.
Many people have problems with the need to learn additional things and may initially
resist accepting that the situation is beyond what they already know. However, most are
willing to expand their knowledge gradually as long as they are allowed to retain what
they already know without revisions. There are several sources for the new knowledge.
The most expedient source is to obtain the additional knowledge in formal learning
programs or from coworkers or others who have understanding of the situation. Other,
more difficult and resource-intensive sources involve formal or informal research and
investigations to establish the new knowledge.
c. Revising and replacing old and inappropriate knowledge. This occurs when the
situation is contradictory to, and breaks with, the person’s prior knowledge. In this case, it
is necessary to build new knowledge carefully and to verify that the situation under
consideration is interpreted correctly and is, indeed, contradictory to what is believed to be
true. This leads to a stage of uncertainty where several competing hypotheses may be
entertained to explain the situation.
Only when there is positive evidence that the obtained information is correct and the
new situation invalidates what is previously known should the person accept that it is
necessary to revise his or her knowledge. Most people have problems accepting that they
are wrong (which this case implies) and resist recognizing the need to consider different
beliefs and knowledge.
There are several sources for this knowledge and they are generally the same as for
case b above. Another source is to learn from real-world experiences that prior
knowledge is wrong and needs to be discarded. This is easier to accept from readily
observable physical phenomena (as for example the behavior of the chemical process is
quite different from expectations).

Learning and the Four Conceptual Knowledge Levels

As indicated above, we learn and develop our knowledge in different ways using many
different modes. The various modes that we may use contribute very different amounts of
knowledge to the four conceptual knowledge levels as illustrated in Figure 6-9 for ten
different learning modes.
From this illustration we can see that the self-driven explorer obtains the broadest and
most valuable knowledge and may well be on the road to become a master after having
obtained great expertise from other knowledge development modes. General education
provides the necessary foundations of systems, general schemas, and methodologies
(systematic knowledge). In comparison, the best way to obtain routine working knowledge
(automatic knowledge) is through on-the-job training and practice, practice, practice!
208 Knowledge Management Foundations:
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Figure 6-9. Schematic Illustration of How Different Learning Modes Contribute to the
Conceptual Knowledge Levels.
Knowledge-Development Mode

Self-Driven
Exploration
Self-Driven Legend:
Studies
Extensive
General Contribution
Education Large
Specialized Contribution
Education Good
Contribution
Research
Programs Small
Contribution
Development
Programs No
Contribution
Apprenticing

Specialized
Training
Training
Programs
On-the-Job
Training
4. Automated 3. Decision- 2. System & 1. Vision & Conceptual
Working Making Schema Paradigm Knowledge
Knowledge Knowledge Knowledge Knowledge Level

A Model for Effective Teaching

Given our goal to provide new knowledge effectively and quickly, and our present
understanding of how people -- and organizations -- learn, we are in a position to propose an
explicit teaching model. The model is based on our understanding of top-down learning that
provides understanding of underlying principles in the form of schema that can be detailed
and made more concrete, first as scripts and later as routines. At the same time, it is based on
bottom-up learning where specific instances (or “events”) are observed, internalized, and
aggregated to form concrete models for how to deal with situations in the form of routines and
generalized to form scripts and broader schemas. Transfer of knowledge is quicker, is
performed with less errors and misconceptions, and provides greater insights and flexibility
when it provides underlying concepts populated with samples of representative factual
Learn! -- Create and Exchange Knowledge 209

knowledge.1 The approach is also motivated by the findings of Singley and Anderson, .2
The teaching model is also based on the notion of how knowledge is held at the different
conceptual levels: goal-setting (idealistic) knowledge; systematic knowledge; pragmatic
knowledge; and automatic knowledge. A graphical illustration of the teaching model with
examples of which level of abstraction may be taught -- with indication of which cognitive
levels that may be emphasized -- is presented in Figure 6-10. This illustration presents the
general structure -- the schema -- of the teaching method. Its major points are:

Figure 6-10. Example of the Effective Teaching Model.

Level of
Abstraction Beginning Schema
to Introduce "40%" "80%" Final
General Characteristics Schema Schema Schema
Schema 3 7 11 15

Script to Final
Script Form 2 6 8 10 10 12 14 14 Set of
Understanding Scripts
of Broader
Domain
Final
Routine 5 9 9 13 13 Set of
Routines

Instance 1 4 6
(Event)
Example to Very Different Illustrative Illustrative Examples
Set Stage Example Example

Start Evolution
Over Time
Conceptual
Level
Goal Setting 1 2 3 4 5 6 7 8 9 9 10 10 11 12 13 13 14 14 15
(Idealistic)
Knowledge

Systematic
Knowledge

Pragmatic
Knowledge

Automatic
Knowledge

Start Evolution
Over Time
Legend -- Degree of emphasis: None: Slight: Moderate: Significant: Extensive:

1 This model is in part based upon Wiig & Freedman (1993).

2 Mark Singley and John Anderson (1989) The Transfer of Cognitive Skill.
210 Knowledge Management Foundations:
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1. The teaching process starts with introduction of a very practical example to set the stage.
The emphasis is on providing understanding of where and why it is valuable to know
about the subject matter being taught, and what some ideal characteristics are.
2. The next step is to introduce a more general case -- a script -- to provide appreciation that
there is a broader domain and to indicate some of its characteristics. The script describes
all major aspects of the initial instance but permits considerable variations. If the instance
describes a story for how to start the engine of a 1992 Ford automobile, the script will
explain how to start a car -- or a truck -- in general, be it modern or ancient, gasoline or
diesel. The emphasis has changed to impart knowledge about the underlying principles
and some rules for how to work pragmatically with the subject matter.
3. After introducing the script, understanding is expanded by providing further abstraction
and generalization in the form of a beginning schema to introduce general characteristics.
The emphasis is primarily on providing systematic understanding to prepare for learning
more detail.
4. After a first pass from a specific example to the very general, a very different example --
yet congruent with the presented schema -- is introduced. The emphasis shifts back to
impart more concrete knowledge.
5. A routine approach -- based on the last example -- is introduced to characterize handling
of a complete situation. Up to this point it often is possible that relatively isolated aspects
of the domain have been treated and the routine is a model for how to handle a complete
situation. Emphasis is almost exclusively on pragmatic knowledge.
6. The routine is expanded by treating different variants of its characteristics to create a
corresponding script -- and by introducing illustrative examples of instances that follow
the script. Emphasis is on systematic knowledge underlying the script and on rules and
pragmatic knowledge to work with it.
7. From the new script, the basic schema is defined in greater detail to a “40%” schema with
emphasis on systematic knowledge.
8. A new script is created to show how the expanded schema leads to another script that
may be similar to the prior script. Emphasis is shared between systematic and pragmatic
knowledge.
9. The foundation has now been prepared for presenting more detailed knowledge. Several
routines are presented. Illustrative examples are provided here and in all further steps.
Students are provided with repeated exposure to the material to internalize it -- to use
knowledge about the domain easily and automatically. The emphasis is on pragmatic and
automatic knowledge to assimilate particulars about the domain.
10. After a set of routines and detailed “How-to’s” are taught and generalized into scripts
(with examples) while emphasizing systematic knowledge.
11. The amount of practical and theoretical domain knowledge is sufficient to revisit and
expand the schema.
12. Schema is applied to generate a new script, in a different direction, to provide further
insights into underlying principles. This begins a new “Abstract-Concrete-Abstract” cycle
(in the example, the final cycle) that allows gradually building general understanding with
concrete know-how.
13. The final set of routines and pragmatic knowledge is provided with emphasis on
Learn! -- Create and Exchange Knowledge 211

internalizing selected knowledge to where it becomes automatic and “second nature.”

14. In addition to pragmatic knowledge becoming second nature, it is also important that
many of the underlying principles become well internalized and this is provided through
working through the final set of scripts.
15. The last step is to complete the schema and relate it to the scope of the domain’s
systematic knowledge to establish a broad and well established Goal-setting
understanding.

SOME ASPECTS OF THE EFFECTIVE TEACHING MODEL

The effective teaching model proceeds on several tracks. While teaching the subject
matter of interest in “Abstract-Concrete-Abstract” cycles, it also relates what is being taught
to the underlying teaching model and to ways of “thinking about thinking” -- schemas, scripts,
routines, and events, the conceptual levels, and other aspects. It allows recipients to follow
the progress of knowledge transfer and to place what they learn in context.
An important part of teaching in this manner is to build understanding of the concepts that
are important within the target domain. At the same time, the relationships between the
concepts (concept hierarchies and associations) and relations to other knowledge areas are
covered. The importance of organized and focused concept teaching is increasingly accepted.
Experiences with the effective teaching model indicates that people learn faster and more
reliably by introducing the basic material according to a mixed top-down and bottom-up
strategy with explicit coverage of the relevant concepts and by relating these to the overall
process. The detailed objective of this teaching process is to provide good systematic
knowledge and sufficient pragmatic and automatic knowledge to be able to provide
proficient performance in the domain. In addition, and this may be key, the objective is also
to provide sufficient goal setting (idealistic) knowledge for recipients to develop their own
judgments, assess their own performance, and set their own targets for operation within the
knowledge domain.
An aspect of this model is to allow explicit evaluation and specification of which
knowledge recipients need to possess “in their heads” and which knowledge they only need to
have access to, to perform quality work. The teaching model also allows for providing the
recipients with the insights of how these knowledge areas relate and to teach them what they
are. Experience has shown that knowledge workers need to have considerable schema and
goal-setting knowledge and selected systematic knowledge of scripts to be able to use
external knowledge sources effectively. They need to know when to use the sources, how to
use them, and how to incorporate their results into what they do themselves. They also need
to possess enough internal knowledge to plan the next steps.
212 Knowledge Management Foundations:
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Transfer Tacit Knowledge to Explicit Knowledge -- and

Back
A major issue in learning is the form knowledge takes, that is, whether it is explicit, tacit,
or implicit. As we discussed earlier, the majority of knowledge-intensive activities are
hidden. They are not readily observable and it is often difficult to describe them since they
mainly may represent tacit knowledge. For the learner, who often is a beginner or advanced
beginner, it is difficult to recognize that they take place and even more so, to understand what
is taking place and discern which knowledge is used. In other words, it is very hard to learn
from observing unless we are told what happens and the reasons for the conclusions that are
reached.

Tacit Knowledge

As discussed earlier, people have highly private tacit knowledge about many things. Our
personal knowledge consists of the four types indicated in Chapter 4: (a) facts, confirmed
data, and mental models; (b) perspectives, gestalts, and concepts; (c) judgments, expectations,
working hypotheses, and beliefs; and (d) reasoning strategies and methodological approaches.
Tacit knowledge is so well internalized and automated that we take it for granted and
cannot readily articulate it. It consists of what we have learned so well that we have
routinized it as automatic knowledge, which we draw upon to perform tasks that we know
well. For example, we have tacit knowledge about how we put our clothes on, how we
approach other people, and very importantly, about tasks we perform routinely in our job.
Since we are “quite good” at what we do, our job routines are highly personalized and often
include creative innovations that make us highly proficient.
Within the organization, tacit knowledge in the minds of knowledge workers is of utmost
importance. But since it is tacit, it also has limited use and value. It is, in essence, only
available to the individual who possesses it. Therefore, it cannot be leveraged easily for
general use within the organization. In addition, it follows the individual and will be lost to
the organization if s/he leaves.

Explicit Knowledge

Explicit knowledge can be examined and used directly by either being available to our
conscious minds or by formalized and systematized in documents, procedures, computer
programs, or other forms. It is quite accessible in the form of Public Knowledge and Shared
expertise. Therefore, it can be shared, cumulated, communicated and analyzed. Explicit
knowledge plays enormously important roles within organizations by being available for
direct use and for all kinds of learning situations. As a result, we always strive to increase our
 Learn! -- Create and Exchange Knowledge 213

stores of it as part of organizational learning.

Problems of Implicit Knowledge

Unfortunately, as indicated in Chapter 4, knowledge can also be implicit. It may be

embedded in technology and operating and management practices, or be documented in
research papers and textbooks in forms such as anecdotes, implied conclusions, and narratives
of results obtained. When knowledge is implicit, the source material needs to be reasoned
with and analyzed to extract the relevant knowledge. This extraction process is typically a
highly intellectual activity and as a first step yields tacit understanding in the learner. As a
later step, after working extensively with tacit knowledge, it may be translated into explicit
knowledge for sharing and wider use.
When detailed instances, routines, and events are presented to learners, the higher level
scripts and schemas are typically represented implicitly in the learning material. This places
burdens on learners to extract higher-level concepts, burdens that the effective model is
intended to alleviate.

Tacit-to-Explicit Knowledge Flow

The most important knowledge flow in an organization is the transfer of tacit to explicit
knowledge. When we say that an organization “learns,” we are partly referring to the process
of transferring people’s tacit knowledge into explicit knowledge that is preserved, cumulated,
and made available for use throughout the organization. This is one of the major ways for the
learning organization to increase its available knowledge. Of the many ways to make tacit
knowledge explicit, a few are shown in Table 6-4.

Explicit-to-Tacit Knowledge Flow

The flow of explicit-to-tacit knowledge is exceedingly important in all kinds of personal

learning. When we study books, listen to educational lectures or training presentations, or
obtain specific advice from an expert, we receive explicit knowledge which we analyze and
internalize to make it “our own” by transferring it into tacit knowledge and understanding.

Table 6-4. A Few Examples of Explicating Tacit Knowledge.

Knowledge Source Destination Explication Process
Expert Procedures Book Self-elicitation and documenting
Manager Organizational Structure Designing and implementing new organization
Knowledge Worker Lessons-Learned File Identifying, discussing, documenting lessons-learned
Expert Knowledge-Based System Formal elicitation and codification
Specialist Lessons-Learned Manual Documentation of experiences in fixed format
214 Knowledge Management Foundations:
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Within organizations, the available explicit knowledge is shared so that all concerned can
acquire it and add it to their prior tacit knowledge. As part of this learning process, people
extend and broaden their knowledge and as the new knowledge provides new insights, they
change their frames of reference. That is, they reframe their knowledge by developing new
understandings, judgments, concepts, and associations.

Explicit-to-Explicit Knowledge Flow

When we exchange knowledge expressed in research papers published in journals and

proceedings we, to an extent, try to provide explicit knowledge. But not until the knowledge
is transferred to another explicit form do we have an explicit-to-explicit knowledge flow.
Compiling and organizing explicit knowledge into a new document from books, internal
documents, or other sources by a knowledge worker who first may internalize the knowledge
as tacit knowledge before explicating it. One example of transferring explicit knowledge in
one location to explicit knowledge in another.
Another example that now is becoming important is the Initiative for Managing
Knowledge Assets (IMKA), whose purpose is to create broad knowledge bases within
organizations. These knowledge bases contain well represented, explicit knowledge available
for general access and use and are often assembled from other sources of explicit knowledge
such as knowledge-based systems and all types of documentation. Explicit-to-explicit
knowledge flows are very important within organizations for selecting, combining, and
distributing existing knowledge for specific purposes.

Tacit-to-Tacit Knowledge Flow

Individuals frequently share tacit knowledge. When people work closely together by
collaborating or apprenticing, they are able to share some of their tacit knowledge that is used
in the particular situation. Such tacit knowledge transfer can take many forms. For example,
it can occur by showing what to do in particular situations with only minimal explanations or
it mean learning what the other person knows through inference-based learning (see above).
In addition, when a knowledge professional elicits knowledge from an expert, the expert
typically transfers some of her tacit knowledge to the knowledge professional.

THE EFFICIENCY OF LEARNING

Whenever knowledge flows from a source to a learner, some degradation is involved.

Consider the situation where an expert advises a knowledge worker as illustrated in Figure 6-
11 by transferring tacit knowledge to tacit knowledge. The expert has high proficiencies in
several knowledge areas and holds this knowledge tacitly. In order to communicate it he
needs to make it explicit and encode it into a suitable language. But he can only verbalize and
clarify certain subsets of what he knows. That portion of his knowledge is communicated to
Learn! -- Create and Exchange Knowledge 215

the knowledge worker who receives the knowledge material but is unable to decode all of it.
Some of it is not understood, does not fit existing mental models, clashes with prior beliefs
and understandings, or is just too difficult, complex, or foreign to assimilate; therefore, it is
lost.

Figure 6-11. Inefficiency of Communicating Tacit Knowledge.

Expert Knowledge Worker

Tacit Explicit Tacit

Knowledge Knowledge Knowledge

Explicate Receive
Tacit Evaluate
Knowledge Organize
Internalize

Communicated
from Expert
to Learner

Many of us who have taken golf or tennis lessons readily recognize that the professional
possesses extensive tacit knowledge of how we might improve our game. Pros develop a
particular “language” to communicate their insights. However, as learners we may have
significant problems understanding, assimilating, and translating into practice what the pro
means when he says:
“Collapsing the left side at impact is a common fault of middle- and high-handicap
golfers. The body sags at the waist, the left arm crumples, and the left knee goes either
sloppy or stiff. These hideous moves largely result from and “out and over” attack on
the ball by the right side.
The right side must stay “under” the left side through impact. For it to do so, the left
side must provide resistance: ...” 1
Our own tacit knowledge may not yet have reached the proficiency level required to take
advantage of the pro’s communication. And anyway, our game has other problems that are of
greater importance to us right now and we therefore, may also lack the motivation to pursue
and internalize the particular knowledge the pro tries to provide us with. It may be necessary
for the pro to patiently explain to us why it is required that we learn some of the basics of the
swing before we try to achieve great distance!

1 Jack Nicklaus (1974), Golf My Way, p. 154.

216 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Improving Learning Efficiency

Learning efficiency can, be improved in many ways. One major way is for the source
(expert) to explicate his or her knowledge to the largest extent possible prior to the learning
situation. This may be done by creating learning materials or by thinking through what may
be taught based on how it should be communicated. In addition, we may also select among
the very best knowledge sources to ascertain that the most efficient and valid source provides
the education and training.
Another approach is to provide learners with preliminary understandings, categorization
systems, and motivations to change their beliefs and judgments. We typically are aware of
the need to prepare learners with preliminary and prerequisite knowledge. However, we are
much less cognizant of the need to provide them with motivations and understandings of why
they should obtain the new knowledge and change earlier beliefs. As managers, we need to
focus on these aspects to improve efficiency of learning.

The Knowledge Spiral

Ikujiro Nonaka in his Harvard Business Review article1 introduces the concept of a
spiral of knowledge for the learning organization. This concept explains what happens when
individuals transform their personal knowledge, ideas, and innovations into new product
concepts, improved operating procedures, or new technology and create new organizational
knowledge of significant value in the process. Nonaka suggests that the knowledge spiral
may be ratcheted upwards to increase the organization’s knowledge in four steps:2
1. Build knowledge -- People develop valuable tacit knowledge and becomes an expert as a
result of his or her work, study, or other ways of learning
2. Organize and focus knowledge -- The tacit knowledge is translated into explicit
knowledge to be communicated to others
3. Realize the value of knowledge -- The organization uses the explicit knowledge to
develop new practices, products, technologies, and so on, that help improve its
performance
4. Investigate knowledge -- Individuals work with the newly developed knowledge,
internalizes it, and become experts based on its application -- ready to start the cycle over
again

The knowledge spiral is illustrated conceptually for these four steps in Figure 6-12.
Clearly, the spiral will break if the knowledge remains tacit and stays with the individual
without being made explicit and shared and allowed to grow throughout the organization.

1 See Nonaka (1991), “The Knowledge Creating Company.”

2 These concepts are discussed further in Chapter 10 as indicated in Figure 10-4.
Learn! -- Create and Exchange Knowledge 217

Figure 6-12. Conceptual Illustration of the Knowledge Spiral.

Use & Realize Value

of Improved Knowledge
Increasing
Corporate
Knowledge
Explicate,
Organize & Focus
Knowledge
Use & Realize Value
of Improved Knowledge
Internalize Knowledge
Become Expert
Build New (Tacit)
Knowledge
Explicate,
Organize & Focus
Knowledge
Use & Realize Value
of Improved Knowledge
Internalize Knowledge
Become Expert
Build New (Tacit)
Knowledge
Explicate,
Organize & Focus
Knowledge

Build New (Tacit)

Knowledge

The knowledge spiral may be broken in many other ways: failure to make valuable tacit
knowledge explicit; failure to communicate explicit knowledge; lack of reliance on new and
better knowledge to develop new products, services, practices, technology, and so on; or
failure to allow people to develop their expertise on new more valuable knowledge.
When the knowledge spiral is ascended effectively, it allows repeated improvements of
the corporate knowledge, often within surprisingly short periods of time. In some instances,
new knowledge can be created in the minds of experts, explicated, shared with others, used to
develop new ways, and again become added expertise within a few months. Such results,
require concerted efforts and management attention in addition to a favorable corporate
culture.
As indicated above, some companies are deliberate in their approach to climb the
218 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

knowledge spiral by creating corporate-wide memory systems. These may be based on

capturing reference cases that are retrieved when required by using automated case-based
reasoning (CBR) or other pattern-matching technologies. They may also be based on other
sophisticated knowledge representation approaches such as those developed by Initiative for
Managing Knowledge Assets. The captured knowledge -- as reference cases or in other forms
-- can reflect “lessons-learned” that result from unusual problems or opportunities, or they can
reflect well-established expertise that for many reasons need to be formalized and deployed to
a larger user group.

Be Flexible and Versatile! -- Transfer Skills from One

Application Area to Another
The need for people and organizations to be flexible and versatile is becoming
increasingly greater as the world changes requiring us to respond in new ways. These
characteristics are particularly important for the intelligent-acting organization. For example,
we frequently need to transfer what we know in one area so it can be applied in other contexts
and for other purposes. The need for skill transfer is more important now than ever before as
we strive to become flexible to provide our internal and external customers with increasingly
tailor-made and higher-value work products which often requires quick changes between
tasks -- flexibility. Skill transfer is even more important when we need to be versatile -- when
we need to apply our knowledge to perform totally different tasks that require new
perspectives -- rapidly, accurately, and with great consistency and high quality. These
instances require that our command of our knowledge is sufficiently deep and general to
allow us to go into the new situations quickly and competently. This is not easy. Apart from
the knowledge that we need to possess, we must also have the mental flexibility and
motivation that allow us to meet the new challenges with vigilance and determination.
As discussed by Singley and Anderson, skill transfer is much more difficult than
previously expected.1 Narrowly skilled persons who have been trained to perform their work
function flawlessly without any background understanding or theoretical knowledge are very
inflexible and vulnerable in new situations. Therefore, they often feel insecure and may
become very defensive.
Knowledge transfer is particularly difficult when it involves transfer of automated and
decision-making knowledge from one application area to another and the person has limited
vision and schema knowledge. It is less difficult when transferring deeper understanding
between application areas. Hence, a civil engineer may have little difficulty transferring
structural engineering knowledge from bridge design to high-rise building designs, whereas

1Mark Singley and John Anderson (1989) provide a comprehensive discussion of this issue in
The Transfer of Cognitive Skill.
Learn! -- Create and Exchange Knowledge 219

an expert construction worker with expertise in steel construction has a much harder time
transferring skills to reinforced concrete construction. Similarly, a marketing expert may
migrate relatively easily from the apparel industry to book publishing whereas a soft drink
sales expert may have great difficulties transferring expert knowledge to selling paints and
varnishes.
To be able to transfer skill successfully from one work situation to another, we must be
able to apply prior knowledge to the new situation. As was indicated in Figure 6-6, we must
either have the natural ability to generalize in order to build knowledge from the skills
training provided or must receive a broader knowledge base through education or training.
Since most of us are not good at building knowledge from narrow skills, the best solution is to
provide education to those who are expected to change jobs smoothly to provide the required
flexibility and versatility. In addition to providing these individuals with the technical
knowledge that pertain directly to their tasks, it is also important, as pointed out by Singley
and Anderson, that they be provided with “meta-knowledge,” or cognitive skills, that is, a
general understanding of how to apply knowledge to new tasks in specific situations.
To provide people with more general perspectives and understanding, it is not enough to
offer rote training, which typically provides the people with the basic skill to perform the job,
automatically and without much understanding at all. Training people in rote skills has aptly
been named “senseless learning” as opposed to “meaningful learning,” which provides
broader and much more valuable understanding and insights. Meaningful learning must be
based on a particular perspective and, potentially, specific applications. It is appropriate for
providing an understanding of the extent of the applicability of the knowledge that is taught
and to train the practical use of the knowledge. Abstract “book knowledge” often cannot be
applied by those who possess it until they have opportunity to learn how it applies in practical
situations.

Pool Knowledge!
In order to bring greater knowledge to bear on a particular task, particularly when the task
is out of the ordinary, we often need to make more knowledge available than any single
person or department has. We can achieve this by pooling knowledge from several sources
and bring that knowledge together for the specific purpose of performing the task. In
teaming, knowledge is pooled by bringing together several individuals or groups who each
has expertise in separate but complementary areas.
Teaming can be achieved by having a small group of people collaborate on a one-time
task. It can also be achieved by creating permanent teams whose members have different
areas of expertise, such as those illustrated in Figure 6-13 for two loan specialists who
complement each other to provide loans to high technology start-up companies. In this kind
of knowledge pooling, it is not necessary to make tacit knowledge explicit. Instead, the
knowledge workers participate directly in the work.
 220 Knowledge Management Foundations:
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Past organizational practices frequently led to the creation of specialist groups, each of
which would be able to handle variants of complex problems. To avoid the convoluted work
flows and time-wasting procedures that often resulted from this approach, current
reengineering changes often introduce work practices that rely on knowledgeable generalists
who can perform the whole task in one operation. These generalists, however, need to be
supported by opportunities for teaming with specialized experts on the relatively rare
occasions where the non-routine problems exceed their own expertise.

Figure 6-13. Example of Knowledge Pooling in High Technology Banking.

Proficiency in Proficiency in
Risk Risk
Analysis Analysis
M M
Industry E Loan Industry E Loan
Understanding J Procedures Understanding J Procedures
A A
N N
Understanding B Bank Understanding B Bank
I I
Start-UpsG M E J A N B B N A J E MProcedures
G Start-UpsG M E J A N B B N A J E MProcedures
G
B B
N N
A A
Business J Bank Business J Bank
Analysis E Policies Analysis E Policies
M M
G G
Financial Financial
High Technology Analysis
Analysis
Proficiency in
Industry and Risk Commercial Loan
Start-Up Business Analysis
and Bank Policy
Specialist M Specialist
Industry E Loan
Understanding J Procedures
A
N
Understanding B Bank
I B N A J E MG
Start-UpsG M E J A N B Procedures Total Pooled
B
N Knowledge
A for
Business J Bank Start-Up
E
Analysis
M
Policies Business Loans
G
Financial
Analysis

As indicated in Table 2-5, pooling can be achieved in many ways. One can form “expert
access networks” to provide formalized, active knowledge support systems that allow
generalists and specialists to network. It is also common to cumulate explicit, passive
knowledge from different sources, such as when combining background knowledge from
published reference sources or pooling knowledge from research reports, to create new
Learn! -- Create and Exchange Knowledge 221

reference documents or cast light on specific issues by issuing “application notes” and other
written material. In addition to conventional paper-based knowledge-sharing modes, people
who seek additional knowledge increasingly may resort to computer-based knowledge
dissemination through well structured passive knowledge bases that can be browsed or
queried. More powerful approaches to knowledge-pooling is the increased deployment of
active knowledge-based reasoning systems that provide advice and other types of support on
demand.

Perspectives on Selected Knowledge-Building Practices

and Learning Issues
PEOPLE RESIST LEARNING WHEN COSTS EXCEED BENEFITS

Many people resist learning. Such resistance is particularly prevalent when people are
asked to revise knowledge they already have, or when they need to learn new ways. Some
people would even prefer to think that what they already know will be relevant and useful for
their whole working life and that once they have struggled to attain proficiency, they would
never have to go through that process again. It is relatively easy for most people to add to
their prior knowledge, by building on what they already know with new experiences and
additional understanding. However, it is very difficult to discard what they have become
accustomed to believing is true and adopt new beliefs, that is, learn new knowledge. Yet, that
is what we require of people when we ask them to adopt new paradigms and new
perspectives. We want them to experience a “paradigm shift” and ask them to develop new
concepts, values, judgments, and goals.
To help people learn in these difficult situations, we need to provide incentives. Actively
and explicitly, we need to help them associate the new knowledge with personal advantages,
such as reduced job risks and pains and personal satisfaction and pleasure. In addition, people
need to be able to identify the specifics of upcoming conditions to assess the advantages they
will obtain. Only after internalizing this understanding and developing the required
associations will they see the psychological costs of changing as being less than the value they
perceive and associate with the new knowledge.

KNOWLEDGE CHANGES OUR BEHAVIOR!

The behavior of individuals -- and of organizations -- is to a large extent driven by well-
internalized, at times automatic, reactions and approaches to the challenges and situations
faced. People who learn and practice new social skills tend to become friendlier, more
accommodating, and more effective when dealing with complex situations. Similarly,
analysts who learn powerful methodologies will automatically apply them when problems
require it. Managers who learn to delegate to competent personnel will do that and instead
start to focus on more general issues that are more valuable and have greater impacts.
222 Knowledge Management Foundations:
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Similarly, organizations change their behavior when their people learn about and internalize
new approaches and practices that become second-nature and are backed up by appropriate
systems and procedures, organizational structures, the organization’s culture, and relevant
tools and capabilities.
In all these situations, it is imperative that the individuals involved, and also the
organization, internalize through reflection and repeated practice what has been learned to
the point that it does not become an elaborate, conscious effort each time to apply the new
ways. The “psychological cost,” the mental effort, required to use the new approaches must
be less than the perceived benefits. If these costs are greater than benefits, the new
approaches will not be applied. This requires two things: (1) a deep and broad understanding
of the new knowledge (rote learning is very inflexible and does not easily provide the
capability to change, continue to learn, or be innovative); and (2) practice to become familiar
with, and internalize, the new approaches until they become second-nature pragmatic or even
automatic knowledge.

Empower People -- Help Them Understand the Organization’s Direction

Providing people with new knowledge and allowing them to internalize it, automatically
changes their behavior in those areas where the knowledge applies, provided they understand
how that will benefit them. This is especially of interest to an organization where the
particulars about the organization’s goals, objectives, strategies, and policies can be provided
to all knowledge workers to increase their knowledge of the organization’s direction and
subsequently to allow them to reach a deep understanding of these matters. As indicated,
though, it is necessary to relate the organization’s direction with each knowledge worker’s
personal value system to make them understand the benefits to themselves of supporting the
organization. Building knowledge that is congruent with people’s own value system is a
major component of empowering people to act intelligently and independently on behalf of
the organization. We will discuss this further below as we consider the need to understand
underlying principles in problem-solving and decision-making.

DON’T BELIEVE YOU SAVE MONEY AND TIME THROUGH IN-HOUSE

BOTTOM-UP LEARNING! -- INSTEAD, IMPORT KNOWLEDGE AND USE
OUTSIDE EXPERTISE
Many corporate managers believe that it is prudent to build expertise and start programs in
new areas by having their in-house staff learn by themselves without the help of outside
experts. They envision that through brief courses, self-study, and starting small pilot
programs as learning situations, they will gradually build required team understanding and
knowledge. The theory is that the in-house staff by themselves will be able to plan, guide,
and execute the direction of the new programs in the most efficient manner possible.
However, practical experience and cursory examinations of the various learning- and
knowledge-building mechanisms show that relying solely on self-development is very error
Learn! -- Create and Exchange Knowledge 223

prone and costly. It is true that the in-house teams know the organization’s practices, goals,
and products better than any outsider. In addition, no organization wishes to become
dependent upon outsiders in the long run. But it is also true that any established field new to
the organization already has a large body of knowledge, accumulated at great efforts, that is
very costly to duplicate and reinvent -- in terms of effort, slow implementation, missed
opportunities, selection of less than optimal choices, and plain errors.
For several reasons, it is inappropriate to rely solely on in-house staffers until they have
become very experienced. Beginners, advanced beginners, proficient performers, and even
some competent performers still lack adequate judgments to be able to determine direction
and content of the next steps that should be pursued. They also lack the experience to select
appropriate activities to pursue and, in particular, they lack the insight to conceptualize what
needs to be done and chose appropriate methodologies.
Bottom-up learning, initially promotes a very narrow understanding that is based on the
material the person is almost arbitrarily exposed to. As a result, while certain areas of
pragmatic and automatic knowledge may be well developed, equally important adjacent areas
may remain undeveloped. Worse, systematic knowledge may be marred by “holes” and
numerous misconceptions that lead to bad decisions and loss of advantage. Thus, a great
many valuable and worthwhile advanced technology projects and new management initiatives
have been aborted as in-house teams tried to learn by themselves how to implement the new
approaches. A number of firms report that their first attempt at implementing total quality
management practices by themselves was a fiasco, leading to significant opportunity and out-
of-pocket losses.
Managers who select to start work in new knowledge areas without the help of the best
expert assistance available are starting far down on the knowledge spiral. They delay
building the organization’s expertise and creating quality knowledge work instead of taking
advantage of existing expertise by beginning with higher proficiency and continue the
climb upwards.

EDUCATE, DON’T ONLY TRAIN IF YOU WANT INTELLIGENT-ACTING

ORGANIZATIONS AND PEOPLE!
If the objective is to provide people and organization with knowledge to make them act
more intelligently, they need schemas and scripts instead of just routines. Specifically, they
need broad insights in the form of well-structured and coherent idealistic and systematic
knowledge tied to relevant pragmatic knowledge. They need to be provided with coherent
and broad overviews of what is known, yet be allowed to form their own impressions and
opinions and to integrate these perspectives into their own experiences and world-views. To
provide such broad understanding requires education rather than training.
However, people are often provided with disjointed information in the form of targeted
training programs and documents as “background material” that they implicitly are asked to
integrate and translate by themselves into automatic and pragmatic knowledge. The focus is
224 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

often narrowed to material that is directly related to the primary area of concern, with little
effort made to tie the primary area to adjacent areas, to world knowledge, and to knowledge
about knowledge.
As an example of relative effectiveness, it has been found that informational programs
that flood teenagers with information on risks about drugs, alcohol, sexually transmitted
diseases, and other perils are far less successful than programs that provide broader education
including idealistic and systematic knowledge.1 Successful programs provide frameworks for
how to think about the activities that generate risks and place them in context with the
emotional and social skills. Skills such as these enable the teenagers to be flexible and
generate alternatives for building self-esteem, countering peer pressure and, particularly,
making their daily activities interesting and desirable, yet fitting into their overall life goals
and patterns without resorting to dangerous options. From a teaching perspective, it is clearly
less demanding to prepare for providing raw information. In that case the teacher’s
expectations are that the teenagers will learn “by being told” or respond to “direct implanting
of knowledge,” in the form of what we showed earlier to be the two least powerful learning
strategies.
In this example, it was found that teenagers who were taught by being told paradoxically
increased the very activities they were expected to halt, whereas the teenagers who received
broader education developed a deep understanding and changed their behaviors positively to a
significant extent. Such behavior is fully to be expected; therefore, the underlying notion is
the basis of the personnel development approach used in a number of highly successful
companies.
The main objective of “training” is typically to impart knowledge to improve recipients’
proficiency in performing well-defined, routine tasks. This was illustrated theoretically in
Figure 6-6. We train knowledge workers to underwrite insurance policies, to utilize in-house
MIS environments, and many other tasks. These training efforts are very important, and to be
effective, knowledge workers need pragmatic, and later, automatic knowledge to perform
basic tasks like these. However, the quality of their knowledge work may not depend upon
this kind of knowledge as much as one would like.
The quality of knowledge work is a function of many factors. Quality of routine
knowledge work may be measured by its promptness, completeness of execution, and how
error-free it is. Quality of knowledge work on more difficult, nonroutine tasks, however, is
better measured by the value of the final product (i.e., the overall value of analysis, decision,
or other results). For our purposes, that is generally a function of the degree of intelligence
with which the task is performed. As discussed earlier, the knowledge required to deal with
complex and non-standard tasks is for the most part pragmatic, systematic, and idealistic and
is provided through education rather than training.

1This example is adapted from D. Goleman (1993) “Teen-Agers Called Shrewd Judges of
Risk,” Science Times, The New York Times, March 2, 1993 p. B5.
Learn! -- Create and Exchange Knowledge 225

Training Often Has Drawbacks When Contrasted with Education

All organizations have limited budgets for education and training. As a result, trade-offs
are always associated with how these budgets should be allocated, who should benefit, and
what kind of knowledge and skills should be provided. Training -- the imparting of specific
skills -- has always been considered more tangible and immediately useful than education.
Also, it is much easier to provide as it requires much less expertise from the teachers. In
contrast, good education that is highly relevant to the execution of valuable tasks within the
organization is more difficult and harder to provide. Yet, it is much more valuable for the
organization although its worth often is harder to measure since the effects require deeper
understanding to make explicit.
A large financial organization in the U.S. illustrates these contrasts. It found that its well-
trained customer representatives were able to handle over 20 types of routine customer
inquiries with ease and adequately handle normal transactions with few errors and great
speed. A small number of better educated representatives were additionally able to provide a
much higher level of advice that resulted in significantly greater revenues for the
organization. Initially, this was accepted as “that is the way things are” and training programs
continued to turn out well-trained specialists who had extensive pragmatic and automatic
knowledge but almost no systematic and idealistic knowledge. As a result of strategic
considerations, however, senior management decided to change the personnel development
program to drastically reduce the amount of explicit training. Instead, they provided
extensive education in the principles that would help customers take better advantage of the
organization’s services.

Special Aspects of the Learning Organization

Several quite different of the learning organization need to be considered before we leave
this chapter. They pertain to knowledge flows as well as specific concerns for how
knowledge is treated from a broad perspective.

KNOWLEDGE FLOWS IN THE LEARNING ORGANIZATION

The learning organization needs to identify a number of important knowledge flows to
build knowledge and to transfer it from the various sources to points-of-use. A large number
of knowledge transfer modes, such as education, paper-based materials, expert networks,
computer-based systems of various kinds, etc., are all potentials for effective knowledge
transfer modes.1 Within the proactive learning organization we may find clear distinction of
the roles of the different entities -- the knowledge sources, the knowledge compilers and
transformers who analyze and restructure the knowledge, the knowledge disseminators, and

1See Wiig Knowledge Management Methods: Practical Approaches to Managing Knowledge (1995)
for further discussions of knowledge transfer modes.
226 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

the knowledge users. Figure 6-14 provides some examples of the knowledge flows and the
different entities from a service organization.

Figure 6-14 Examples of Knowledge Flows within the Learning Organization.

Knowledge Knowledge Knowledge Knowledge
Sources Compilers Disseminators Users
&
Technical Transformers
Expert
Specialist Networks

Integrated
Field DSS
Experts Knowledge MIS
Analyses, Division
etc.

Knowledge
Users
Learning Customer Reps
Labs Knowledge
KBS & ...
Compilation
& Developers
Validation

External
Sources Computer-
Educational Based
Program Educational
Developers Systems
Lessons
Learned
Programs
Educators
(Trainers)

PERSPECTIVES ON CORPORATE RELEARNING

“There is no need to rediscover what someone else already knows!” As pointed out in
earlier sections, organizations learn in many different ways. Initially, however, all
organizational learning starts with people -- hiring knowledgeable people and in-house
individuals who learn and build personal knowledge through education and training,
innovation, or activities like R&D.
Unfortunately, lack of focus on knowledge-related processes necessitates an incredible
amount of relearning in almost every organization at great expense and at a great loss of time.
For example, there is limited sharing of knowledge, limited networking, and limited
collaboration between the many departments and disciplines that possess important inputs to
the task at hand. Besides organization-wide knowledge repositories and dissemination
capabilities are virtually nonexistent. Most organizations have not prepared themselves
Learn! -- Create and Exchange Knowledge 227

properly to learn, even though most may pay lip service to the need.
Within most organizations, when people need to perform a task that requires relatively
novel knowledge, they often prefer to learn and obtain the knowledge for themselves even
though a person three offices down already has the expertise and could help. This trend is
partly a result of faulty corporate culture where “you are not permitted to admit that you don’t
know” and “once having taken ownership of a problem, you should be able to solve it by
yourself -- even if it costs more and takes longer.” It is also caused by lack of incentives to
promote the sharing of knowledge with others, partly because of walls between departments
and functions, partly because of the “the joy of learning for myself,” but mostly because of
egocentric constraints. These are caused by personnel evaluation and promotions that are
based more on what a person knows than what s/he can contribute to the organization as a
result of maximizing the value of her/his knowledge through sharing. These sentiments
frequently lead to the “not invented here” (NIH) syndrome.
It is very expensive to relearn. Often it is wasted effort and lost time. Worse, it may be a
missed opportunity to ascend on the knowledge spiral. As a result, the working knowledge
that is obtained through unnecessary relearning -- the resulting organizational proficiency
level -- is lower than it has to be. Further, the work products are consequently diminished in
value compared with the value they would have had if knowledge were shared.

LEARNING, INNOVATION, AND CORPORATE CULTURE

It is very important that the corporate culture supports learning and innovation both by
individuals and by the organization itself. If the culture works against learning and
innovation, any other efforts to build knowledge are likely to fail. On the other side, if the
culture supports and facilitates learning and innovation, it may only require few additional
incentives to make the organization a “learning organization” with the result that it becomes
proactive, effective, and highly intelligent-acting.
In this regard, it must be recognized that learning takes place in many ways and that it is
easy to focus only on the individual who seeks knowledge. Within an organization, it is often
equally important to also recognize the function and role of individuals who have knowledge
and expertise that others could benefit from. Consequently, we must also focus on the effects
of corporate culture on the flows of knowledge.
228 Knowledge Management Foundations:
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The Negative Side

In many organizations culture and management style do not support independent thinking
and innovation, but create hurdles that discourage learning. For example, suggestions from
subordinates may not be accepted or considered seriously when problem-solving or decision-
making is top-down. Other organizations, for some reason, do not consider it acceptable to
extend one’s knowledge outside one’s immediate area of expertise, learn new trades, or obtain
additional knowledge about new and broader things. At times, such initiatives are considered
an inappropriate invasion of another department’s domain. And it is almost worse when
managers pay lip service to learning without supporting it with budgets, time, incentives, or
career improvement paths.
Organizational culture may stifle innovation by individuals at any level. For example,
many companies still practice “Taylorism” because “the management” believes that
employees cannot be trusted or because managers and professionals think they “know best”
and only ask their employees to perform work as told without questions or suggestions.
In other common situations, both culture and corporate incentives reward the knowledge
people have. This is typically the case where personnel evaluation procedures, explicitly or
implicitly, give points for how knowledgeable a person is without evaluating how well the
person shares and otherwise makes knowledge available to others in organization’s interest.
As a corporate executive remarked: “Under these circumstances only idiots would want to
share their knowledge!” Such situations make people insecure and protective of what they
know. That is, they are afraid of sharing knowledge thinking that they will lose value, or even
their position, in the process. As a result, they keep their knowledge close to their chest,
thereby severely limiting its value to the organization.

The Positive Side

Many good approaches are used to make the corporate culture support learning and
innovation. Some provide incentives to delegate decisions and share the knowledge required
to make the delegated decisions well. Others embed implicit incentives into the culture to
promote the notion that it is desirable to be knowledgeable, broad-minded, innovative, and to
act intelligently -- perhaps even to admit that one is ignorant about important issues. In these
cases, it is also required that the cultural changes be augmented and backed up with tangible
incentives ranging from recognition by peers and superiors to increased earning power.

EXPERTS WHO DON’T LEARN BECOME OUTDATED

Traditionally, many organizations have allowed their experts to become outdated by

neglecting to foster an environment or a culture that supports and promotes continued
education. Quite frequently, experts in important positions are considered so valuable that
Learn! -- Create and Exchange Knowledge 229

they are so overloaded with work that they have no time or energy to renew their knowledge
as the world around them changes. The typical learning curve for such experts is illustrated
hypothetically in Figure 6-15.

Figure 6-15. The Unfortunate Slow-Down and Reversal

in the Learning Curves for Many Experts.
Amount of Vigilant
up-to-Date Learner
Knowledge

Conventional
Expert

Entry-Level Proficiency

I. II. III. IV. V. VI.

Childhood University Beginning Performing The Expert Outdated
& Years Professional Professional Years Expert
Adolescence

Time
In this figure the solid line indicates the learning curve that an expert who is not allowed
to learn can be expected to follow from infancy to retirement. Relevant knowledge (“Amount
of Up-to-Date Knowledge”) is built up over time, perhaps as indicated in the figure and after a
number of years the knowledge ceases to be current and may even start to lose its value.
Through her/his career, the expert will have proceeded through the following six life stages:
I. Childhood and Adolescence
II. University Years
III. Beginning Professional
IV. Performing Professional
V. Expert Years
VI. Outdated Expert
As indicated, having reached the point in their careers where their expertise is becoming
obvious and valuable, conventional experts start to renew their expertise less and less. This
may in part be due to lack of opportunity to keep ahead of a changing world or the fact that
experts have internalized their expertise to the point that the knowledge has been compiled
and has become automatic and is difficult to change. After some time, the expert is no longer
on top and becomes outdated.
230 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

This is a terrible loss for several reasons. First, the expert has vast experience coupled
with an excellent mind and therefore, is an unusual resource that could be maintained as a top-
level contributor for a considerable time. Second, the quality of work that the expert
generates before it is evident that s/he is outdated often has deteriorated, leading to
considerable opportunity costs.
Frequently, however, we come across experts who continue to be vigilant learners and are
allowed, or allow themselves, to keep their expertise current. Their value to the organization
is very high and by far outweighs the cost of keeping up-to-date. They are often characterized
as highly motivated individuals who are curious and seek any opportunity to learn more. In
addition, they are often very idealistic. Often, these unusual individuals have environments
and superiors that value and support their continued quest for current understanding. In some
instances, the “system” prods and pushes people to continue to learn even when they rather
would be left alone!
In general, when incentives and recognition by peers and management clearly show that
keeping ahead of the world is valued, experts in particular, will continue to learn with gusto.
The value to the organization of continued up-to-date expertise is often very large and can
propel the organization to become a leader in its field.

EXPERTS’ PERSPECTIVE ON THEIR ROLE AND FUTURE

In the learning organization where management has decided that sharing knowledge will
be rewarded and experts will be encouraged and allowed to continually learn, the experts
agree that their role has changed.
In the conventional organization, on the other hand, the expert’s primary role has been to
perform expert work -- to contribute value added by embedding knowledge in the work
products. A much smaller, albeit noticeable, emphasis has often been placed on having the
expert share expertise with others over time such as taking on apprentices or perhaps through
selected teaching. Unless there have been particular incentives, experts have not been willing,
or had the opportunity, to leverage their expertise by being debriefed to codify their
knowledge for broad distribution to those who might use it in the organization’s interest (i.e.,
to create value added beyond that which a single person can achieve).
Experts do not mind leveraging and sharing their expertise with others provided:
• The knowledge sharing will be formally recognized by the organization in the form of
suitable incentives, ranging from peer recognition, to promotions, to compensation gains.
• They are allowed and encouraged to “grow” by deepening their knowledge and pursue
their expertise -- and -- they are allowed to take on new responsibility as their expertise
changes and as their peers who now have access to their expertise can perform many of
the tasks that they previously were the only ones who could do (this issue is very
important to them).
• The “culture” -- peer acknowledgment, management acceptance, and so on, is supportive.
In total, these issues result in a quite different model for the role and use of experts within
Learn! -- Create and Exchange Knowledge 231

the learning organization. It is, however, quite sensible and experts believe that it will allow
quicker ascent up the knowledge spiral while at the same time resulting in a more intelligent-
acting organization that generates deliverables with greater value-added knowledge content.
Perhaps Chaparral Steel may provide us with the ultimate example in this regard.1

UNDEREDUCATION AND OVEREDUCATION

When people are trained to perform tasks without being given sufficient understanding of
underlying principles, we classify them as undereducated. When people are educated but not
trained to use it in practice -- or when they receive insufficient training in use of work aids
that allow them to use their theoretical knowledge -- we classify them as being overeducated.
Some idealistic perspectives of these conditions are illustrated in Figure 6-16 where
appropriate education and training will provide the combinations of performance and
competence knowledge indicated along the diagonal line.
This figure indicates that beginners have practical performance knowledge with beginning
know-how sufficient to work under constant supervision and theoretical competence
knowledge that provides a beginning understanding of several areas and slight overall
understanding. Proficient performers on the other hand, have performance knowledge that
allows them to work reliably with many unusual challenges with deep understanding of many
areas and good overview of the domain. If a person for the most part can work practically as
a proficient performer, but lack deeper understanding, that person is undereducated and may
be a potential liability to the organization by being asked to perform tasks that s/he is not
prepared for with undesirable results.

1 Garvin (1993).
232 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Figure 6-16. Some Perspectives of Undereducation and Overeducation.

Practical
Performance
Knowledge

Tackles Very
Difficult & Unusual Expert

ed d of
) ing
Task Expertly

at an te
u c r s t pi
n d f U r m ed
ed de S
er n In
(U o fo ain
Works Reliably Proficient

ck er Tr
With Many Performer
Unusual Challenges
La o P
t

Works Reliably Competent

Under Performer
Normal Conditions

m
or
d) rf
t e Pe
Works Well Under Advanced

re ilit ted
c a to
Supervision Under Beginner

v e Ab c a
du y
Normal Conditions

(O nd du
Beginning Know-How E
Beginner
yo
Sufficient to Work Under
Be

Constant Supervision

Cannot
Theoretical
Do Ignorant Competence
Anything Knowledge

Has No Has Beginning Has Good Understands Has Deep Has Very
Knowledge Understanding Insight Routine Understanding Broad & Deep
of of Many Areas Well. of Many Understanding
Several Areas & Has Some Areas & of Most Areas
Areas & Slight Emerging Understanding Good of Domain
Overall Broader of Nonstandard Overview of
Understanding Insights & Broad Areas. Domain
Chapter 7 How Reasoning and
Thinking are PERFORMED

Thinking and Reasoning

This Chapter
Before we can examine how knowledge is used for problem-solving and decision-making,
we need to understand in greater detail how we rely on knowledge, that is, how we think and
reason. That is the focus of this chapter.
We start by introducing some aspects of thinking and what provides directions to it. We
next discuss commonsense reasoning and simple reasoning strategies such as deductive and
inductive reasoning. We then progress to analyze abductive, analogical, associative, case-
based, model-based, qualitative reasoning and reasoning under uncertainty. We also
introduce the concept of “fuzzy” reasoning. Since most reasoning situations are far from
ideal, we present approaches for how people cope with complex reasoning situations by using
dominant-hypothesis and most-important factor reasoning approaches. Further, most
reasoning situations are complex, involving approaches such as temporal and causal event-
chain reasoning, nonmonotonic reasoning, reasoning by default, planning, and multiple
hypotheses reasoning. These approaches are presented leading into a brief discussion of
highly complex, machine-assisted reasoning approaches such as mathematical programming,
simulation, and knowledge-based systems.
While reasoning situations can be straightforward and require little thought about the
perspective with which the situation is considered, complex situations often require
reconsideration of the frame of reference, (i.e., reframing), particularly in situations where we
can introduce innovation and creativity. We also discuss how we develop judgments, proxy
beliefs, and new values based on our reasoning. Finally, we offer some perspectives on some
reasoning practices and issues.
Throughout, where applicable, we indicate pitfalls and inappropriate aspects of reasoning
and other problems that affect our performance.
234 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Represent, Create, and Use Knowledge

Thinking
Thinking is the creative activity that transforms sensory inputs -- experiences -- and prior
knowledge into new knowledge that we can use to pursue our goals. Knowledge, in turn, is
the key ingredient in nurturing and directing our intellectual functions. We think: we react,
we worry, we dream, we believe, and we generate visions and set goals -- all based on our
knowledge and influenced by information about relevant situations and conditions. Many of
these functions overlap and share the same mental mechanisms and we employ them when we
think as we will discuss below.
Yet, knowledge itself is the creation of thinking. All our wisdom, expertise, know-how,
technology, science, and art are the result of human thinking, conscious as well as
nonconscious. All innovations, all progress, and all human endeavors are created by our
thinking. The nature and complexity of thinking have long been objects of intense scrutiny by
philosophers, and in the last century, by psychologists and cognitive scientists as well.
Thinking, however, is still a puzzlement and remains intriguing, particularly because of its
enormous flexibility, versatility, and power and because so much of it is invisible to us.

THINKING, REASONING, AND KNOWLEDGE

Thinking takes many forms and serves many purposes. We think when we learn, when
we generalize, when we retrieve memories, and when we analyze and categorize, search for
patterns, try to see similarities, identify associations, try to find additional instances, detect
inconsistencies, reason consciously, and in many other endeavors.
K. J. Gilhooly expresses what thinking is in this way: Thinking involves “a set of
processes whereby people assemble, use, and revise mental models. For example, thinking
directed toward solving a problem may be regarded as exploring a mental model of the task to
determine the course of action that should be the best (or at least satisfactory). A mental
model often enables the thinker to go far beyond the perceptually available information and to
anticipate outcomes of alternative actions without costly overt trial and error.”1 Gilhooly also
postulates that “thinking is always occurring during periods of wakefulness, albeit often in a
free-floating daydreaming fashion.” Recent research, however, shows that much thinking is
performed when we sleep and dream. Indications even suggest that we actually need sleep to
organize the new knowledge that we have obtained during the day.
Most important intellectual functions are tacit, unobservable, and may also take place
when we dream and during other periods of sleep. When we draw associations, try to
remember, or assess outcomes from complex situations we mostly perform these tasks

1 K. J. Gilhooly (1988) in Thinking: Directed, undirected and creative, p. 1.

Thinking and Reasoning 235

nonconsciously. When knowledge workers “mull over” some conceptual material in their
minds, like when they internalize and organize newly acquired knowledge to build congruent
understanding of their expertise and expand their associations, they may even appear to
daydream or be totally inactive. Some managers have frowned on such behavior, considering
these activities to be illegitimate and undesirable since they are not directly involved in
generating work products. Yet, these activities are absolutely necessary for the knowledge
workers to internalize newly acquired knowledge and to grow and develop, and thereby
increase the organization’s knowledge assets.
An important type of thinking is explicit reasoning, which we discuss in this chapter. It is
of specific interest in the context of KM since it leads to conscious conclusions as part of
decisions and other recognizable work products where the reasoning process can be inspected
and verified. Other manners of thinking, however, may be just as, if not more, important
since they are central both to knowledge creation and organization and to our automatic or
tacit knowledge work. We use reasoning when we analyze a situation and when we arrive at
conclusions, and that typically is the analysis result we are seeking. Johnson-Laird even
proposes that people for the most part reason without using “mental logic and formal rules of
inference.”1 Instead, we reason with propositions and associations embedded in our
understanding of our natural language. This may imply that much, if not most, of our
reasoning is largely nonconscious and directed by immediate understanding and associations,
similar to the “Leisurely and Unfocused Exploration” to be discussed in the next chapter.
Our thinking processes and reasoning approaches are very complex governed by both the
knowledge we hold, our life’s experiences, and the way our brains are organized (i.e., by our
individual aptitudes, cognitive styles, and dominant memory styles). Thinking is performed
in different ways, using many mechanisms. When we mull over a particular condition our
thinking involves retrieval of episodes, specifics, and concepts that relate directly or are
associated with the condition. Our thinking process may also retrieve and examine both more
detailed and more abstract or aggregated (chunked) concepts that relate to the central
concepts. It may furthermore trigger priming memory issues that remind us, and permit
retrieval, of relevant long-term memory items. And when we mull over something our
thinking will also rely on some of the reasoning strategies that are second nature to us.
When we read or listen to someone speak, we constantly think, that is, we process the
incoming information stream. A simplified example of this process is illustrated in Figure 7-1
for determining the meaning of the sentence: “The sailboat sailed away” after we have first
automatically parsed the sentence structure and verified that it acceptable from a syntax
perspective.
As illustrated, the words sailboat and sail evoke associated concepts in our concept
relations (our semantic or associative networks). Next, to determine the full meaning of the
communication our minds might go into relevant concept hierarchies to identify the nature

1 Philip Johnson-Laird (1983), Mental Models: Towards a cognitive science of language,

inference, and consciousness.
 236 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Represent, Create, and Use Knowledge

and particular sense of meaning of these concepts within the context in which they were
presented. All this happens automatically, nonconsciously, and fast unless we encounter a
new idea, a new term, or a conflicting thought. In such cases, we become consciously
involved in the process and may attempt to use active reasoning to resolve the acceptability
and deeper meaning of the communication and the way it relates to what we already know.
That slows down the process and may even halt it altogether until a satisfactory resolution is
obtained. During complex learning situations involving new perspectives and concepts,
conscious thinking is often frequent and places great demands on both learner and
communication source to pace the information stream to allow it to be processed properly.

Figure 7-1. Illustration of Complex Processing Paths with Related Associations and
Concepts after a Word Communication Has Been Received.
Word Concept Concept Hierarchy
Communication Relationship
(Semantic Net) Vessel

Sailboat Freighter Tanker

"Sailboat"
Sailboat
n Sloop Ketch
otio Part
om
Loc
Wind
Agen

Ha

Driven Jib
Lo t
bit

co en
t

m
at

mo
tio ple
n Im
Behave
Sail

"Sail"
ium

Lo
ca
Med

tio

Roll Move
n

Water Material Ocean

Sail Drift Motor

Intuition

One aspect of thinking is intuition. We appear to intuit when we reach conclusions about
complex situations without being able to identify how we arrived at the conclusion or what its
basis is. Highly proficient experts and masters may solve complex problems in this way,
Thinking and Reasoning 237

recognizing the solution from their extensive automated or compiled knowledge that is based
on their great experience. In these situations, therefore, the intuited solution may be highly
appropriate.
However, many of us draw nonconscious conclusions about complex situations that we
have much less expertise with. “My intuition tells me that ....” We cannot explain how we
reason or how we arrive at these conclusions, but most likely they are based on our mental
models and involve proxy beliefs as discussed later in this chapter. However, often we are
reluctant to follow our intuition for the following reason: the congruency and relevance of our
mental models and the reasoning leaps that our nonconscious reasoning process followed are
not known and may be unacceptable.

WHAT DIRECTS OUR THINKING?

Our thinking -- the issues we focus on -- is to a large degree motivated by external factors.
We are required to think in order to deal effectively with the issues that arise in our daily
activities, whether related to work, leisure, or life functions. The direction of our thinking and
reasoning, that is, the nature of the premises that we formulate and the conclusions we seek to
reach, is determined by both our goals as they relate to the situations and issues that we face
and our deep, and often nonconscious, beliefs about the world around us. Our beliefs are
often proxy beliefs based on misconceptions instead of correct understanding of the world.
Hence the direction of our thinking may at times appear to be quite irrational to others since
they do not know our underlying premises.

We Avoid Pain and Seek Pleasure

Our personal goals appear to be generated by two forces. The strongest force is our
attempt to avoid pain. We see potentially painful conditions in many situations. For
example, we try to avoid embarrassment, we certainly wish to avoid physical pain, we do not
want to lose -- be it a game, our job, or money -- and we are very protective of our pride and
self-esteem. As a result, we automatically examine situations for potential risks that may lead
to pain and we set our mental goals and perspectives for reasoning and generate premises and
hypotheses to be tested accordingly.
The second force that directs our personal thinking and reasoning is our search for
pleasure. When we find situations that may lead to opportunities for pleasure, after
ascertaining that we do not need to focus on averting painful conditions, we set goals and
generate premises and hypotheses to explore how we may attain the possible pleasures. We
seek pleasure in everything from success in our current project, acceptance by our peers,
companionship, family relations, and in many other ways.
In work situations our basic goals may still be associated with pain and pleasure although
our immediate tasks are usually governed by explicit work goals. However, our choice to
observe those goals is based on our personal goals. As we go into the details of our work
238 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Represent, Create, and Use Knowledge

tasks, we make a number of personal reflections and a large number of personal choices that
often are directly governed by personal goals and our interpretation of how these goals will be
fulfilled by what we do. As a result, very little of our work-related reasoning is free from
influence by our personal goals in spite of our observance of explicit work goals and our
attempts at maintaining objectivity.
We also focus our thinking on internally generated issues. When I get an idea it starts me
thinking. I may wake up one morning with an idea for how to change the marketing approach
to our services. I may build upon this idea all day long, explore options and flesh out
interesting approaches while evaluating how well they will perform. I think, I reason, I plan,
and I form judgments about how well it will work. I detect problems. I revise opinions and
approaches. True, my idea may have been triggered by an outside event, but it is just as likely
that it resulted from a long-term concern I have struggled with.

Reasoning Strategies
Knowledge clearly is not of much value if it is not used. It must be used to make
products, deliver services, and manage the enterprise, or be packaged and traded as a precious
commodity. Knowledge is also of great value to help us have fun, enjoy our family and, in
general, provide us with quality of life. Using knowledge implies that we apply it to perform
intellectual tasks such as analyze a situation, make a decision, innovate, create a
communication, carry out a negotiation, motivate a coworker, and a host of other things that
we do in our daily business life, including cracking jokes to relieve tense situations or to
create artistic drawings to make nebulous points more understandable.
All of these tasks require that we apply knowledge available to us to reason -- explicitly or
tacitly, consciously or nonconsciously -- about the situations at hand to generate conclusions
that we can act upon. Reasoning, in other words, is how we use knowledge when we apply it
to a specific situation or context. Reasoning and thinking have been discussed by many
researchers from both cognitive science and business perspectives.1 Most of these discussions
address conscious and well-defined reasoning whereas people, in business and otherwise, for
the most part perform their intellectual functions using tacit or nonconscious reasoning.
People use several kinds of reasoning strategies to address intellectual tasks. Covering a
wide range, some of these strategies focus on precise reasoning while others support

1 Diane Halpern (1989) discusses reasoning with great insights in Thought and Knowledge:
An Introduction to Critical Thinking. K. J. Gilhooly, (1988) provides in-depth treatment of
reasoning and other active cognitive processes in Thinking: Directed, undirected and
creative. Irving Janis (1989) discusses at length the cognitive and behavioral aspects of
decision making in Crucial Decisions: Leadership in Policy Making and Crisis
Management. Philip Johnson-Laird (1983) also discusses reasoning and its relation to
mental models in Mental Models: Towards a cognitive science of language, inference, and
consciousness.
Thinking and Reasoning 239

qualitative or imprecise reasoning. The simplest approaches are used by highly experienced
experts when they recall a precise, applicable, answer from a wealth of “compiled” and
memorized cases that are familiar to them and fit the situation exactly. Other relatively
simple approaches use precise deductive or inductive reasoning in situations with no
uncertainty. More complex approaches build on the simpler reasoning approaches, and in
addition, include reasoning under uncertainty, dominant-hypothesis reasoning, multiple-
hypothesis reasoning, and reasoning with nonmonotonic strategies (to allow a person to
change his or her mind about what the conclusion should be). We will examine some of these
approaches briefly to obtain a beginning understanding of how reasoning works and is applied
in our use of knowledge. Most of these reasoning strategies are also mimicked when used by
automatic reasoning devices like knowledge-based systems (KBSs).
By themselves, explicit reasoning strategies frequently do not provide the innovative and
insightful propositions and conclusions that set creative and unusually valuable individuals
apart. Creative reasoning is often nonconscious and may involve a number of very complex
steps. It can be taught and developed in people along with attitudes that promote innovation,
particularly when these individuals also receive deeper understanding about idealistic
knowledge and systematic knowledge both in the topic area and in adjacent areas. Several
companies and prominent individuals have worked to perfect methods to transfer these
qualities to people in all walks of life.1;
An important and integral part of reasoning is the way premises and mental models are
chosen and formulated. This is also part of problem-solving which is discussed in the next
chapter. We choose particular premises and mental objects (including mental models) to
reflect the precise issues that we wish to analyze and to help facilitate the manner in which we
plan to approach the reasoning investigation. For most people, this is typically a
nonconscious process that may be arbitrary since they do not have explicit knowledge of the
reasoning methods they normally use, nor are they given much knowledge of optional
reasoning strategies and how to formulate the problem to use them. Typically, we do not help
people to think about thinking -- and it may be about time to start!
A major objective of reasoning is to establish the meaning -- be it of a situation or
condition or the potential outcome of a decision alternative.

COMMONSENSE REASONING

Every schoolchild has extensive common knowledge about the world around them and the
ability to reason with it. Everybody has commonsense, the ability to make obvious, yet
complex, inferences using this knowledge. Almost every kind of intelligent task -- learning,
understanding and communicating with natural language, interpreting what we see, problem-
solving, decision-making -- requires aspects of commonsense.

1One notable company that promotes education of creativity is Synectics in Cambridge,

Massachusetts.
240 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Represent, Create, and Use Knowledge

All of us use commonsense reasoning with great ease and often nonconsciously. Yet it is
very complex, involves many abstruse reasoning modes, and extensive common knowledge.
In addition, it is almost impossible to analyze based on our present understanding of
reasoning. As seen below, we are able to identify many different reasoning modes or
approaches, most of which are part of, and building blocks for, commonsense reasoning.
Some of the reasoning approaches are almost automatically available to all of us, others have
to be learned before we use them regularly with confidence, before they become second
nature.

DEDUCTIVE REASONING

When we reason deductively, we accept one or several premises to be true subsequently

and deduce a conclusion that follows logically from the premises. We may use “true-false”
logic, which can work in several ways. (We may also use qualitative logic as explained by
“fuzzy logic.”) A form of deductive reasoning frequently used in daily life is syllogistic
reasoning, where we postulate (or less formally: “have in mind”) two premises that lead to a
deduction. A well known example of deterministic syllogistic reasoning is the following:
Premise 1: “All men are mortals.”
Premise 2: “Socrates is a man.”
Conclusion: “Socrates is mortal.”
Our existing knowledge forms the premises and in those cases where our knowledge is
explicit we can often represent these premises in deductive reasoning with “if-then” rules. In
terms of the example above, this would lead to if-then rules such as:
Premise 1: If (the object) is a man; then (the object) is mortal.
Premise 2: If (the object) is Socrates; then (the object) is a man.
Conclusion: “Socrates is mortal.”
The conclusion remains the same. When we reason about a situation, we use deductive
reasoning to generate new facts and to deduce conclusions from what we already know and
from information (facts and truths) about the situation under analysis.
In many respects, deductive reasoning is safe, well-considered, but dull and not at all
innovative. However, it is a very necessary reasoning mode, not least when we are subjecting
innovative and creative propositions, hypotheses, and visions to the test of reality. In
addition, deductive reasoning is also frequently embedded in the more complex reasoning
approaches.
As shown in Figure 7-2, a number of declarations can be combined to arrive at a
conclusion through deductive reasoning when an investment situation is presented. In this
example, the information about the situation is shown as rectangles, prior knowledge as
declarations in irregular shapes, local conclusions without frames. The final conclusion is
shown in the bottom right corner.
Thinking and Reasoning 241

Figure 7-2. Simple Data-Driven Reasoning with Declarative Knowledge Items.

Investment is
low risk
Yields above
The investment 15% ROI are
yields 14% OK

Risky
Prime is 8% investments
Yields must
at least be must have
5% above high yields Good
prime investments
Any must have
Yield is acceptable higher yields
acceptable yield is OK than inflation
since risk
Company is OK Consider only is low
acceptable
yields
If Prime is high,
Investment is acceptable investment yield
from yield/risk perspective should also be
The company
must be high
acceptable to The Portfolio
Company
invest in must be
is OK
balanced
Company's
Look at both industry is OK
company and The investment
-- fits balances the
industry portfolio
Balanced
portfolios portfolio in an
must spread acceptable
risks manner
Investment will help
Industry is spread the risk Spread risks
not yet in It is OK to
portfolio by investing
in many Invest in
industries Company

The reasoning shown in this figure is “data-driven,” that is, the data available on the
investment opportunity drive it in a “forward chaining” reasoning process to generate the
conclusion. As indicated, there are no uncertainties present so the reasoning process is
deterministic. The various input data are paired with the appropriate declarations to generate
a local conclusion, which then can be used deductively later in the reasoning process. People
often reason in this deductive manner. However, we do not always reason as clearly and
crisply as this. Most often, we reason with “fuzzy” concepts and under considerable
uncertainty. In addition, if the premises and facts are not congruent, we are often willing to
242 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Represent, Create, and Use Knowledge

make “reasoning leaps” which may lead to rather shaky logical inferences.
The declarations in this simplified example are chosen to reason about conclusions that
pertain to the specific goal of identifying if the proposed investment is acceptable (i.e., should
it be funded). The underlying goal is dual: “to seek the pleasure associated with making
good money while avoiding the pain of investing in a losing situation.” In this case, an expert
provided the source knowledge and identified the declarations that should be included in the
reasoning situation. The total reasoning situation was much larger including almost one
thousand declarations.

INDUCTIVE REASONING

In inductive reasoning, we try to see which underlying principle or new conclusion may
support our observations. We use inductive reasoning when we generalize and learn about the
world. We collect observations to see similarities or create patterns that we then can use as
bases for generalizations or hypotheses. This is how we organize and structure our
observations about the world and build new concepts, beliefs, and expectations for what the
world is like. We use inductive inferencing to create general rules or specific conclusions
from examples and patterns. We also use inductive reasoning, as indicated below, when we
want to explore new opportunities and create new solutions.
When we reflect over what we know and explore how things are, we generate new
knowledge and conditions from existing knowledge and information about the situation that
we think about. As discussed in the previous chapter, inductive reasoning plays a central role
in learning by humans of all ages. It also is a foundation for construction of scientific
theories. A simple example of inductive reasoning is:
“Our customer has given us a large order this week.”
“He also gave us an unusually large order last week.”
“We are his only supplier of these products.”
“I suspect that his business has increased and I therefore expect that we will get a large
order next week as well.”
In this case, it is clear that the conclusion of inductive reasoning is not certain and that we
are not in a good position to generate a new hypothesis with a high degree of validity if the
customer’s demand has really increased, he may be in the process of lining up another
supplier, or he may only have experienced a temporary increase in demand. Nevertheless, we
may be prepared to act on our hunch. At times inductive reasoning may lead directly to
inappropriate conclusions. One such example is:
“I’ve seen that all cats have four legs with claws and a tail.”
“All dogs I’ve seen also have four legs with claws and a tail.”
“I know that dogs and cats are mammals.”
“I therefore, conclude that all mammals have four legs with claws and a tail!”
Thinking and Reasoning 243

For those who have seen other mammals, this conclusion can be disputed with some
success since we will know right away that horses and cows do not have claws. A similar
inductive reasoning script was followed by a major company working overseas:
“I’ve seen that all construction projects in that country have big profit margins thanks to the
built-in contingency factors.”
“All the management consulting projects I’ve seen there also have big profits and they did
not know their extra costs either.”
“I know that the construction and management consulting projects are so different that
together they can represent projects of all kinds.”
“I therefore, conclude that the computer project we are bidding on in the country also will
have big profits so let’s reduce the contingency factor and lower the price to make sure we
get it!”
Unfortunately, the situation did not turn out that way and led to a large overrun.
Induced conclusions based on observations that are only partially representative of the
total domain they aim to represent can lead to hot debates and arguments, but are nevertheless
frequently encountered. Even careful professionals and experts fall into the trap of reasoning
with insufficient observations and are led to wrong conclusions. We have often found that
“expert knowledge” in difficult-to-observe situations, such as chemical process operations or
personnel management, contains numerous erroneous conclusions that have resulted from
inductive reasoning based on observation samples that are too limited or reasoning leaps that
are too broad.
By use of inductive reasoning, we can never prove that a conclusion is correct. We can,
however, disprove a hypothesis with it. Yet, inductive reasoning with broad leaps is very
innovative and can lead to significantly creative propositions with great merit. We just have
to apply prudent reality tests to ascertain that the new propositions “hold water.”
Inductive reasoning is the formal method used by many automated systems that use
artificial intelligence techniques to construct crisp if-then rules automatically from examples.
To some extent, this type of reasoning is the basis for “machine learning.” Inductive
reasoning also forms the basis for learning by induction and for unsupervised learning by
observation and discovery as discussed in the previous chapter.

ABDUCTIVE REASONING -- CREATIVE PEOPLE USE IT TO GET BETTER

INSIGHTS FAST!

The reasoning examples examined above have limited relation to real-life. Abductive
reasoning (Peirce's abduction) is a form of inductive reasoning that is more powerful and
realistic and can involve large leaps of faith. Over one hundred years ago Peirce proposed:1
“The first stating of a hypothesis and the entertaining of it, whether a simple interrogation or

1 As quoted by Buchler (1955) in Philosophical Writings of Peirce.

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with any degree of confidence, is an inferential step which I propose to call abduction or
retroduction.” Abduction is the creative hypothesis-formation process that we use when we
follow a hunch or jump to conclusions without sufficient evidence in the form of information
or knowledge to make a proper, step-by-step inductive logic chain. Instead, we appear to use
abstract mental models, conceptual associations, and relational links to generate intuitive
conclusions and explanations for the goals we seek or to generate new designs. We often
seem to abduct when we generate new creative notions.
Abductive reasoning is very much the generative aspect of creative “generate-and-test”
problem-solving strategies. It appears to be the thinking strategy we use most frequently
when we solve problems or engage in general discourse where, for lack of time or
information, we cannot cover each logical step. It is also very useful for reasoning with
qualitative knowledge, which constitutes the majority of what we know. By using
“enlightened abduction” we skip reasoning steps by guessing at what may be a reasonable
immediate or end result. When we skip too many reasoning steps, we often end up being
wrong. Even when we are right, we have great difficulties stating our position to others with
any degree of confidence and clarity, and our argument may be considered invalid. A simple
example of abductive reasoning is:
Premise 1. “This order is very large. Do you know who placed it?”
Premise 2. “No. The only customer I know who has a warehouse big enough to store that
much is Calamity Industries.”
Conclusion. “I think the order is from Calamity.”
In this example, the conclusion may be far from certain and this type of reasoning may
lead to inferences which actually are assumptions that will need to be reality-checked before
they can be adopted as truths. We also see that the knowledge used is qualitative rather than
“crisp” or defined with precise quantification.
We use abductive reasoning extensively when we “search for solutions” while analyzing
or diagnosing difficult and complex situations that we may not fully understand. In these
cases, we may generate interesting and potentially valid trial hypotheses that are far from
obvious and previously identified facts. We will entertain the hypothesis by searching for
evidence that may support it and we may subject it to reality testing by looking for other
evidence that would conclusively refute it. Clearly, abductive reasoning is not without
“uncertainty.” Instead of statistical uncertainty, however, abductions introduce questions
about the plausibility of the proposed conclusions.1 We also use abductive reasoning in
discussions and when we attempt to prove a point that we are not quite certain about or when
we want to “stretch the truth.”

1The concept of plausibility denotes the degree to which a proposition appears to be worthy
of belief. In contrast, probability denotes how statistically likely a condition is to exist.
Thinking and Reasoning 245

ANALOGICAL REASONING

Analogical reasoning is the reasoning process we follow when we formulate hypotheses

based on how similar a premise or conclusion is to patterns and situations we know from
previous experiences. Also, analogical problem-solving is often used by human experts. It is
frequently encountered by knowledge scientists when they analyze how decisions are made
and knowledge work is performed, or when they elicit and model expert knowledge. An
example of analogic reasoning is:
“We have a situation here where the Bluegills are exposed to spoils from the channel
dredging.”
“The spoils include a large amount of silt and a small amount of heavy metals.”
“The Bluegills are similar to Smallmouth Bass and a thorough study made of Smallmouth
Bass indicated that it was badly affected by a situation somewhat like this.”
Conclusion. “I am sure that the Bluegills will be adversely affected by the dredge spoils.”
This case is very similar to many practical situations. We have close analogies between
the new situation and the situation that we know something about and the conclusion can be
drawn with some level of confidence. A major issue with analogic reasoning, however, is that
the relevance of the analogies that are considered to be similar may vary quite a bit. Although
some analogs may be close on all important attributes, others may be close on some attributes,
but very different on other attributes that are of greater importance in the context of interest.
Recent research indicates that analogical reasoning may be one of the most important
knowledge-organizing and structuring approaches in human beings. We use it to set up
associations, act as reminders, and organize mental objects into classes. Along with abductive
reasoning, it may be the most important reasoning modes for creating new and innovative
solutions and directions.

ASSOCIATIVE REASONING

Bill Jones is setting out to plan the requirements for building a new distribution facility.
His task is to create the initial schedule and budget estimates and identify the major
functions that must be included. Given the specifications for the facility, he identifies the
major project phases from his general schema for other facility projects and includes the
players for designing, construction, and equipping. Bill has not planned for a
distribution facility before, and while documenting and specifying the major phases,
associations surface in his mind to other activities that need to take place according to
some experiences he has had and according to what he thinks is required for the
situation. With the project start, he associates early permit applications, ordering of
long-lead-time items, hiring and training of operating personnel, and many other
activities. His reasoning about which items to consider, their importance and impacts,
and how they relate to the project are mainly through associations. Bill uses associative
reasoning to plan the project.
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Associative reasoning is another powerful thinking and reasoning approach and is related
to analogical reasoning. We use associative reasoning when we transfer the reasoning focus
from one concept to a different but associated concept and draw conclusions based on
associations rather than logical premises. We often do so by building logical bridges and
relations between concepts that we associate with each other, particularly when reasoning
about situations that we are not intimately familiar with. Since associations are inexact
relationships, the conclusions are plausible rather than definite.
When we reason associatively we are often led to new perspectives and new ways to
define situations and problems. It is one of the great tools of innovation and creativeness. As
a result, many approaches to teach innovation and creativity emphasizes analogical reasoning
combined with associative reasoning with considerable success.
Virgil Joseph is considering how to approach a very difficult customer who potentially
could place an unusually large order if handled right. Virgil is apprehensive since this
customer has a tendency to give him a real hard and unpleasant time. At the same time,
Virgil associates the potential for success with real pleasures -- year-end bonus,
excellent annual review, and recognition by fellow salesmen and superiors.
Virgil is torn. Should he try to avoid the unpleasantness and pain by forgetting about the
customer or should he pursue the opportunity of success? He does not sit down to
reason objectively about the situation. Instead, he lets his reasoning be directed by his
subjective associations regarding the certain pain versus the less certain long-term
pleasures. In the end, he decides that the pain is tolerable, particularly since he also
would have some painful explaining to do if he chose to forget about the customer.
Frequently, as in the situation Virgil faced, the associations that enter into our reasoning
are not between concepts, but between the values we place on the potential outcomes from the
actions that are considered.

REASONING WITH PATTERNS -- PATTERN RECOGNITION

Patterns are reliable and usually observable samples of characteristics of objects,
situations, or conditions. Recognizing and matching patterns (“pattern matching”) is one of
the most important reasoning methods that we have. It allows us to detect similarities and
differences between complex situations where they often are quite obscure. We frequently
need to determine if a particular pattern is present and compare it with others that we
remember to establish if the two are similar.
People are very good at recognizing patterns. We work with visual patterns all the time
and can recognize a particular person’s face or see that an object is a chair almost instantly.
From this perspective, visual pattern recognition is a simple reasoning method that we all are
born with. Similarly, we recognize aural patterns to identify words, and we can easily
recognize if a person walks or runs. In reality, general pattern matching is exceedingly
complex and involves many mechanisms that we do not understand.1

1In The Architecture of Cognition (1983), John Anderson provides extensive discussions of
pattern matching and recognition.
Thinking and Reasoning 247

Metaphoric Reasoning

We can also recognize patterns that contain wide varieties of abstract features. Thus, we
can recognize if one situation is similar to another, if a behavior pattern falls into a known
category, and how it may be characterized in order to be classified with other behaviors. We
often employ pattern matching to see analogies and to draw associations.
Earlier, in the story about X’s daughter who looked for sand dollars in shallow water, we
illustrated how we match conceptual patterns to identify and compare similarities between
complex characteristics that often are highly abstract. That is an example of what has been
called “metaphorizing” or “metaphoric reasoning.”
We rely extensively on complex pattern matching in analogic and case-based reasoning.
We also use it when we categorize and cluster events, characteristics, concepts, and other
mental objects and when we generalize concrete experiences to create scripts and schemas. It
has been suggested that a highly developed capability to reason with abstract patterns --
metaphoric reasoning -- is indicative of, and a requirement for, expert and master proficiency.
This is particularly relevant for the aspects of mastery associated with the ability to see
situations from new perspectives (“reframing”) and identify approaches that may borrow from
other areas. We often see metaphoric likeness when we reason abstractly to determine the
degree of analogy between generalized cases. For example, we may use metaphoric
reasoning simultaneous with analogic reasoning to exploit the content of pattern similarities.
Metaphoric reasoning is not without danger, however. Using metaphoric reasoning to see
a situation as an analog of a previously known situation provides a single and limited
perspective that often is valid in only a few dimensions. Therefore, we may be unduly
influenced by the analogy we perceive and may end up with a conclusion of very limited
value.

SPATIAL REASONING

We use spatial reasoning almost all the time to identify where we are and where to go
next. We do this by building, exploring, and traversing more or less explicit cognitive maps,
models, or images of physical situations. Whenever we walk through a door, move from one
room to another, or drive around town in our car, we use spatial reasoning to orient ourselves
to project what lies ahead and to plan where we need to go to arrive at our destination. As
indicated in Chapter 4, however, the capability for spatial reasoning differs markedly from
one person to the next. So do our approaches and representations.
Many people have significant problems building cognitive maps from their experiences
and developing the path they need to follow, whereas others do so with great facility. Most
people seem to use mental images of a situation or condition when they reason about it. It
appears, however, that extensive use of such imagery is not automatically a precursor to good
path finding in physical environments. Some individuals report using elaborate imagery and
accurately memorized physical entities when reasoning about physical phenomena such as
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water running in and out of tanks. Yet, the same individuals can be poor path finders who
often lose their way and may have problems orienting themselves in a new space even after
they have studied maps and other abstract descriptions of the space.
One of the “intelligences” or cognitive styles suggested by Howard Gardner is “spatial
intelligence.”1 There are many indications that a number of people have spatial
representations and reasoning as their preferred mental mode. In the same way, others may
prefer a verbal mode of thought and others yet an abstract, conceptual mode.2

REASONING WITH UNCERTAINTY

We are faced with uncertainty in almost every situation. For example, the information we
have in hand may not be accurate or specific aspects of the situation may not be certain. If we
have measures of the uncertainties involved, say in terms of probability functions, we might --
at least theoretically -- use formal mathematically-based methods to incorporate and reason
with this information in order to make unbiased conclusions.3
Unfortunately, that is not the way in which we normally tackle such problems. Normally,
we do not have sufficient information to determine statistical expectations -- even if we would
be inclined to do so. Instead, we tend to introduce personal judgments of what the true
information is and subjective interpretation of what the potential consequences are.

Reasoning about Risks

Several researchers have observed that people are ill equipped to reason under uncertainty.
The intuitive reasoning that we engage in when faced with uncertainty is often based on easily
used but quite fallible heuristics.4 When a person reasons about an uncertain situation and
arrives at one of several possible conclusions, research indicates that when the person is more
familiar with one conclusion than the others, s/he will tend to consider the better known
conclusion to be more likely in spite of better information that may indicate the opposite.5
Our judgments and interpretations invariably reflect our degree of risk avoidance and we

1 Howard Gardner (1985), Frames of Mind: The Theory of Multiple Intelligences.

2 Diane Halpern (1989), Thought and Knowledge: An Introduction to Critical Thinking.
3 Several numerical approaches exist including: Bayes’ Rule to provide the probability of a

conclusion; the modified Bayesian rule to provide likelihood ratios; confirmation theory to
calculate certainty factors; Dempster-Shafer belief theory; evidential reasoning; and fuzzy
reasoning. These, and other methods, are appropriate for quantitative analyses, but are not
applicable for direct human reasoning unless the user has become an expert who has worked
so extensively with a particular method that it has become second nature. However, the
methods are very useful when incorporated into computer-based reasoning support systems.
4 In their book Judgment Under Uncertainty: Heuristics and Biases, Kahneman, Slovic,

and Tversky (1982) present extensive investigations by a number of researchers about our
inability to deal correctly with uncertainties.
5 The “availability heuristic” resulted from research by Tversky & Kahneman (1973).
Thinking and Reasoning 249

can be very conservative if we try to avoid risks. Our statistical intuition is flawed and we
also have difficulties in estimating the likelihood of uncertain events as repeatedly observed
by researchers in the field.
This tendency has a profound influence on our perception of risks since we intuitively will
assume that the risk is greater for those outcomes that we know more about or have recently
been concerned with. We are affected when we think about situations and conditions or hear
them mentioned in the news. And we will be more concerned about these situations or
conditions regardless of their actual likelihoods even though we may have been explicitly
informed about the statistical data.
Such behavior is often detrimental to good management. All of us may know of situations
where during the risk/reward assessment of a potential project, one participant is reminded of
a serious problem that befell another project and led to its demise. Whereas that problem is
highly unlikely for the present project, the participant proceeds to vividly outline the problem
details with the effect that all concerned become convinced that the risk is too great and the
project is canceled -- unwarranted.

CASE-BASED REASONING

Tracy Jimenez, AltCo’s senior Application Engineer, is approached by Unox Corp with a
request to help identify if one of AltCo’s heat shield products can be used to reduce costs
while improving quality in one of Unox’s furnace models. Tracy visits Unox and works
with their engineers to identify the specifics of the application. As she analyzes the
potential application she realizes that in many respects it is very similar to a rocket
engine situation she worked with last year. In other respects, it is similar to an
automotive engine application she is also familiar with. In both cases, some details are
almost identical in addition to having more general characteristics that are similar. The
solutions for both previous cases ended up using the same AltCo product, applied
somewhat differently with very good operating results.
Tracy’s approach to finding a solution was to identify the matching details and general
characteristics from both prior cases. Together, they covered almost fully the specifics
of Unox’s requirement. She designed an application approach based on the same
product with modifications that fell between the two reference cases. Tracy used case-
based reasoning to generate her solution -- and the solution worked.
Case-based reasoning (CBR) is perhaps the approach used most often by people. It is
primarily an analogical reasoning strategy that uses prior experiences and reference cases to
interpret situations, solve problems, explain events, or generate reality tests and critiques of
solutions.
We use reference cases that often are stored in our episodic memory for case-based
reasoning. These cases are experiences that we abstract, characterize, and memorize as
knowledge objects. The paradigm for the case-based reasoning strategy rests on the view that
our minds work as follows:1

1 Adapted from S. Slade (1991) p. 47.

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1. The content of our memory is primarily experience.

2. Our memory is highly abstracted and characterized1 where concepts, mental models,
episodes or reference cases, and other knowledge objects are connected by direct
associations, priming associations, chunking and category hierarchies, and in other ways.
3. The structure and organization of our memorized knowledge objects vary over time. Our
memory is dynamic and is updated and reorganized by new experiences.
4. Our reasoning is guided by our experiences -- our knowledge -- which we use to interpret
and understand new situations and decide how to handle them.
5. Learning is motivated and driven by in response to new conditions that we have not
previously experienced.

Table 7-1. Twelve Case-Based Reasoning Situations.

Concrete & Highly Partly Abstract & Highly Abstract &
Specific Specific General
ROUTINE SCRIPT SCHEMA
Pragmatic & Systematic & Idealistic &
Automatic Knowledge Pragmatic Knowledge Systematic Knowledge

Precise Match Recall & use directly Select the most applicable Select the applicable case
Between memorized interpretation of script that corresponds to schema & explicate it to
New Situation situation & corresponding the situation & explicate an applicable script.
& Memorized ways of handling it. it to make it fit the details Next, explicate the script to
Cases of the situation. fit details of situation.

New Select two or several concrete Select the most applicable case Select applicable schemas,
Situation cases with characteristics scripts, interpolate between interpolate between them
Falls that together match situation them, & explicate resulting to create a script that can be
BetweenKnown & interpolate to create script to create a new case explicated to match
Cases new case to fit situation. to match situation. situation details.

New Identify reference case subsets Identify subsets of reference Find applicable schema,
Situation that match situation case scripts that match augment by analogs,
Falls Partially & find script or schema situation & find schema to induction, or abduction.
Outside to guide assembly guide assembly of subsets Create script by explication.
Known Cases of subsets into new case. into new script to be explicated Explicate script for situation.

New If possible, extrapolate Find most applicable Find most applicable

Situation existing reference cases; scripts & extrapolate if schema & extrapolate if
Falls Totally otherwise, possible; otherwise, possible; otherwise,
Outside invent. extend by analogies & extend by analogies &
Known Cases abduction. abduction.

The objective with case-based reasoning is to: (a) analyze and interpret a new situation or
condition; (b) compare (by pattern matching) the principles and characteristics of the new
case with experiences that are memorized as part of prior reference cases; and (c) identify

1 Some cognitive researchers refer to this as “indexed.”

Thinking and Reasoning 251

from experience how the new situation should be handled. By using reference cases instead
of going back to first principles, we apply powerful shortcuts to obtain the desired results. As
illustrated in Table 7-1, we may choose from a wide range of case-based reasoning situations
depending on how well the new situation matches previous cases and the degree to which we
have abstracted or automated our insights into situations of this nature. For situations that we
know so well that we have automated reference cases to routines, and where there is a precise
match between the new situation and a reference case, we are in a position to directly apply
what we know from the reference case, therefore, it becomes a simple issue of selecting which
reference case to apply.
Clearly, case-based reasoning relies on many other reasoning strategies to match
situations, interpolate between different cases, extrapolate beyond previously known cases,
and extend by analogies and abduction as indicated in Table 7-1 for the different types of
situations. This reasoning strategy is simple only in its most concrete form when there is a
precise match between the new situation and a memorized case. In all other instances, CBR is
complex. It is particularly complex when it involves pattern matching of complex, abstract
characteristics, interpolation, extrapolation, or explication of scripts and schemas to fit a
concrete situation. In these cases, additional reasoning is required in the form of associative
reasoning and complex approaches such as planning.
Reminding, that is associations triggered by priming memory when the new situation is
characterized, plays an important role in case-based reasoning, particularly in nonroutine
situations. In these less familiar situations, we are reminded of other cases that share
characteristics with the present situation prompting us to start thinking about how we can
apply what we learned previously. We also use reference cases to remind us about how to
proceed, even in well-known situations.
Other aspects are also important when we perform case-based reasoning. For example,
we use complex pattern recognition extensively to identify if the new situation matches one or
several reference cases. We use our ability to interpolate between cases or extrapolate from
cases to generate a mental case that is similar to the situation at hand. We explicate schemas
and scripts to generate concrete and practical mental cases to understand and deal with the
situation. And we use simpler reasoning approaches like analogic and abductive reasoning to
extend known reference scripts and schemas to cover the situation.
Case-based reasoning is very powerful and allows us to handle exceedingly complex
reasoning situations when we are generally familiar with them. This is an aspect of CBR that
we need to strengthen in all people who work in our organizations by providing them with a
good background of valid reference cases. CBR is not infallible, however. It is reported that
some people use reference cases blindly without validating them for the new situations and
just relying on previous experience. Thus, they rely on automatic reference cases and often
show characteristics of “stagnated professionals.” Even proficient performers may be
unreasonably biased by their reference cases and fail to examine the characteristics of the
situation appropriately. Beginners have different problems. Because of missing experience,
they do not reason well with analogies, nor do they have well-developed judgment to isolate
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those aspects of the situation they should focus on.

Good Conclusions Require a Wide Range of Reference Cases!

Based on Table 7-1, to draw good conclusions in different situations and to be flexible and
versatile, knowledge workers must possess a broad range of reference cases. These must not
all be highly specific and concrete in the form of routines. Most of them, particularly those
that pertain to infrequent conditions or conditions with frequent variations, must be more
abstract and general to allow the necessary flexibility and ability to adapt to new situations.
To provide knowledge workers with appropriate reference cases, they must be given
opportunities to learn. They need to learn specific and routine cases through training and on-
the-job operational experience. Equally importantly, they need to learn scripts and schemas
for dealing with more general and flexible reasoning situations that they will encounter. The
latter is best obtained through broad education focusing on general principles and an
understanding of how to translate these principles into detailed analyses and conclusions.

Case-Based Reasoning Is Valuable When Automated

Case-based reasoning is not only performed by people. We have been able to create
powerful computer-based CBR systems that serve many organizations as corporate-wide
memory systems where important reference cases are stored in knowledge bases to be
retrieved when the situation calls for them. One practical advantage of this technical
approach is that the description of the reference cases can be in free-form natural language
and therefore, can be applied to a variety of different situations.1

MODEL-BASED REASONING

Henry Paulsen, ConloCorp’s CIO, is assembling next year’s information systems budget.
He has concluded that he needs to reduce the development budget for the new
purchasing support system by some twenty percent. He can take several approaches. He
is not willing to cut people arbitrarily across the board since that will just delay the
project. Besides, he may lose good people in the process. Instead, he has a model in
mind for how to run the project in a totally different way. By introducing a new design
philosophy, using fourth-generation languages, or even “object-oriented programming,”
Henry thinks that he will be able to reduce the development time by more than twenty
percent, keep the same people, and perhaps end up with a superior product.
As he thinks about his options, he uses his existing mental models to project how he sees
the project develop: the major stages; their resource requirements; and the resulting
deliverables. He pencils in times and costs for training, start-up, and all the other
activities and finds that he indeed is able to stay within his limits -- if he is willing to take
the risk of embarking on a new approach on such a large and critical project! To arrive

1 An overview of interesting applications of CBR technology is provided by Arnold (1993).

Thinking and Reasoning 253

at this conclusion, Henry has used a complex version of model-based reasoning.

We often use static or dynamic mental models, logic models, or even external, possibly
automated, models to represent causal chains and other complex relations. When we
automate complex reasoning models we may use explicit mathematical or computer
simulation models to project what we consider to be likely outcomes to aid our reasoning. In
these representations, we use the formalized models to generate results or outputs from a set
of input conditions.
We use model-based reasoning tools as supports for our analysis by treating them as basic
reasoning elements in two ways: (1) to predict resulting outcomes from specified input
conditions; or (2) conversely, to impute a set of required inputs that will lead to a specified
outcome (resulting state) that is of interest in our analysis. When we use personal computers
with spreadsheets, specialized simulation models, and other computer analysis packages, we
tend to integrate the results from these models in our thinking process. In effect, we engage in
model-based reasoning to extend our reasoning power.
Using formalized external models has a number of advantages. These models, and the
computers they use, enable us to perform tasks quicker and more precisely and detailed than
our minds allow. More importantly, they are explicit and inspectable. They typically include
considerable embedded knowledge that is often the best available and may be much better
than a single expert can provide.

QUALITATIVE OR APPROXIMATE REASONING

Peter Harrow, the new product manager for PRATCO, has made an extensive analysis of
which approach he should use to bring a new product to market. There are several
options and some flexibility for which features to include, how to price the product, when
it should be introduced, and the size of the first production run.
The insights that Peter has from his analysis is to a large extent qualitative. He also has a
great deal of personal expertise and “feel for the market” that he draws on to make his
decisions.
He first wishes to decide which features to include and how to price the product. Each
additional feature will increase the cost. They will also increase the attractiveness of the
product -- some considerably. However, if he includes all features, the product will be
priced out of the market. There are also trade-offs between increased sales and slightly
lower price -- resulting in a lower profit margin.
From past experience, Peter knows that an attractive product in this niche can be priced
higher than the average and still sell well. He knows that by including most of the extra
features he will be able to offer a very attractive product. Peter, however, does not have
crisp logical or mathematical models that describe these relationships. Instead, he has
well founded qualitative understanding of what the implications will be of different trade-
offs.
According to these considerations, Peter decides to price the product high -- but he will
include an extra feature that results in a slightly lower profit margin than PRATCO
normally would consider. He reasons that by choosing this strategy, he will be able to
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offer a very attractive product at a high, but acceptable, price and that it will sell very
well.
To be able to take advantage of higher volume sales, Peter also decides to make the first
production run much larger than normal and to introduce the product as early as possible
before others invade the market.
In the this example, Peter used qualitative reasoning to arrive at his strategy. He reasons
according to an approach such as the following by knowing from experience that:
All attractive products while priced slightly high will sell well
The present product is attractive and priced slightly high
The present product will sell well
Based on this premise, and knowing that his product not only will be attractive, but will be
very attractive, he reasons qualitatively that:
All attractive products while priced slightly high will sell well
The present product is very attractive and priced slightly high
The present product will sell very well
Typically, real-life reasoning and decision situations are complicated by many factors.
Some of these factors involve uncertainties about the accuracy of the information we have or
about what is, and what is not, known. Other factors involve the fact that many of our mental
models and knowledge objects do not correspond precisely to each other as required by the
context we want to reason about. They are not congruent, only peripherally relevant in the
same way the knowledge about the smallmouth bass was “reasonably” relevant to the
bluegills in the earlier example. Another complicating factor is that we may engage in
qualitative instead of “crisp” reasoning in the same way that Peter did in the above example.
We are frequently faced with situations that either are outside our direct area of experience
when we only have limited knowledge or that are totally new and different and, therefore,
require guessing, fact finding, exploration, or pure invention. In these situations, we do not
have highly precise models of the situation and conditions available to us and will instead use
reasoning approaches that allow us to approximate.

Qualitative Reasoning

As indicated in Chapter 4, we often represent our knowledge qualitatively with discrete

symbolic categories or brackets. We think about things in terms of whether they are “small,”
“big,” or “normalsized” and use similar qualitative labels for the concepts that describe the
different conditions that we consider in our minds. We also reason in a qualitative manner
rather than with explicit precision, often with “fuzzy” concepts that allow us to deal very
effectively with qualitative imprecision and uncertainties. The qualitative nature of our
reasoning takes different forms:
• We use qualitative measures for the states of conditions to denote their magnitude,
accuracy, or plausibility.
Thinking and Reasoning 255

• We use qualitative judgments for the degree of correspondence between two or more
mental objects. Hence in order to arrive at a conclusion for expected price elasticity for a
new high-tech toaster, we may think that our prior knowledge of price elasticities for a
high-tech dishwasher and a low-tech toaster are “sufficiently close” to provide us with the
needed insights.
• We have qualitative mental models of the effects that will obtain when a situation is
changed.
Human expert reasoning is often qualitative, in addition to being frequently both
approximate and judgmental. Further, it is “fuzzy” rather than crisp using a discrete, true-
false logic. We use qualitative reasoning to compensate for uncertainties and lack of detailed
knowledge; to make it possible to reason with a vast number of factors in a very economic
manner by chunking these factors into complex concepts; to work with complex,
multidimensional, and often nonlinear relationships; or to be able to deal with large numbers
of individual conditions and situations without having to make it explicit a priori how to deal
with each. Indeed, we deal more frequently with multidimensional relationships than we may
realize. An example of a complex, nonlinear, multidimensional relationship is our knowledge
of how to price a product in the marketplace. I may know that the best price to ask for my
product depends on the price competitors ask, the quality of my product relative to theirs, the
nature of associated services that I also provide, my ability to deliver, my own internal costs,
and perhaps the margin that I can provide to the parties who sell my product to the end users.
If, in complex situations, we could chose to reason with classical true-false logic instead
of using qualitative reasoning, we would have to provide an enormous number of explicit
specifications, beyond what our minds can cope with, and the detailed inferencing required
would make it impossible to deal with most situations. Some reasoning situations would be
so complicated that we could not even complete them within our lifetime. In addition, most
real-life relationships are nonlinear, requiring mental models of how outcomes can change in
drastically different ways depending on the situation. An expert who knows such a situation,
understands that one particular factor may influence the outcome differently (in a non-linear
fashion) depending on the magnitude of other factors, for example. Nonlinear,
multidimensional relationships require very complex and extensive specifications when
described with binary logic. This may be one reason why our minds represent these
relationships qualitatively. To understand how we handle complex relationships, we may use
models based on fuzzy sets and qualitative reasoning to describe much simpler
representations, yet not as precise, than would be possible with true-false logic.

Fuzzy Reasoning

“Fuzzy” reasoning is a qualitative reasoning paradigm that helps us better understand

some of our reasoning behaviors. In contrast to true-false logic which is considered the
classical model, the fuzzy reasoning model is more realistic. It attempts to explain how
people in real-life reasoning seek “to-what-extent” answers instead of the classical “yes-no”
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or “precisely-how-much” answers.1 With the fuzzy reasoning paradigm, we can formally

explain how we take into account and manipulate our beliefs that a condition may be
plausible or “partially true” (in contrast to its probability of being absolutely true).
When desired, we can introduce fuzzy reasoning paradigm in all reasoning approaches.
The paradigm is very powerful in automated reasoning and has a number of important
characteristics in this context. For example, it appears that most experts find it much easier to
explicate what they know about a particular topic in the form of fuzzy declarations than in the
classical true-false form. Thus, we seem to obtain a much more complete knowledge model
from these experts using a fuzzy representation and with a much smaller investment of time
and effort. Also, the resulting knowledge base is much smaller, yet includes the same (some
suggest -- better) knowledge. Finally, it is much more efficient in its operation.
Even though fuzzy systems and reasoning originated in the U.S. and have been
extensively developed here, the concepts have been commercialized much further in both
Japan and Europe.

How Do We Cope with Complex Reasoning Situations?

When faced with complex reasoning situations, people tend to adopt simplifying
approaches to be able to cope. Many factors that force us to simplify reasoning tasks. Some
of the potential coping strategies are listed in Table 7-2 and are also discussed further below.
In this table, we have shown the characteristics of the complicating factors and the coping
strategies people typically adopt. We have also indicated approaches to how complicated
situations can be remedied without resorting to improper simplifications. When people gain
expertise in, and understanding of, the area in which the situations are found, they are able to
develop judgments and libraries and portfolios of reference cases that allow them to handle
the situations very competently and correctly.

Simplifying May Not Always Be Better!

Simplifying reasoning is not the only strategy to pursue when faced with a complicated
situation. Many consider simplification to be a needless sacrifice that produces inappropriate
and wrong results and suggest, therefore, that more powerful reasoning and problem-solving-
approaches should be used instead. Some of these are discussed further in this and the next
chapter.
Our general ability and approach to handling complex reasoning situations are functions
of many factors, including education and social tradition, expectations of peers and superiors,
and the quality of available knowledge and information in the particular situation. Indications

1Fuzzy reasoning, fuzzy set theory, and fuzzy systems were initially proposed by Lotfi Zadeh
and have been developed over a period of almost 30 years. An excellent description of these
concepts is found in Earl Cox (1994).
Thinking and Reasoning 257

suggest that in Europe and Japan, it is socially more acceptable -- even expected -- to solve
complex problems comprehensively by taking into account all relevant factors using complex
reasoning and analysis approaches. In the U.S., on the other hand, the “Keep It Simple
Stupid” syndrome1 is often praised for its expediency due to its reduced need for mental
exertion. It is -- and at times rightfully so -- considered elegant and effective to simplify a
complex situation to its most relevant components. “Everything should be made as simple
as possible, but not simpler!” 2

Table 7-2. Factors That Complicate Reasoning Situations.

Complicating Potential Potential
Factors Characteristics Simplifying Remedial
Coping Strategy Approach
Lack of Knowledge Principles governing situation are CBR* Outside Help
not known or understood MIFR Research
Lack of Important information about CBR Gather
Information situation is missing DHR Information Study
Situation
Uncertainty of Observations are present but are CBR Study Situation
Observations inaccurate or unreliable MIFR
Lack of Time Insufficient time is available CBR Outside Help
before conclusion must be MIFR
reached
Too Many Factors Situation contains many MIFR Complex Analysis
objectives & complex (CBR) Gather
interdependent processes Information
Too Many Possible Many reasons may potentially DHR Complex Analysis
Causes give rise to present situation CBR, MIFR Gather
Information
High Risk Cost of erroneous conclusions is None In-depth Analysis
high Known Gather
Information
* CBR: case-based reasoning;
MIFR: Most-Important Factor Reasoning; DHR: Dominant -Hypothesis Reasoning.
At times, there are good reasons to simplify to avoid being caught up in the complexity of
a situation. Researchers have observed that people tend to feel compelled to take into account
all the information that is available about a situation, whether directly relevant or not. In such
cases, simplification is both necessary and essential to prevent information overload and avoid
being blind-sighted by irrelevant and misleading information.
Most analysts are also familiar with the tendency to consider all possible aspects and

1 The “Keep It Simple Stupid” (KISS) principle focuses on simplifying analysis and reasoning
situations, often using most-important factor or dominant-hypothesis reasoning approaches.
2 Attributed to Albert Einstein but is likely a derivation of Occam’s Razor.
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potential factors of analysis situations that they are unfamiliar with. Such approaches lead to
unnecessary complexity and unwieldy, costly, and time-consuming treatment. The only
appropriate approach is to obtain improved knowledge about the situation by consulting with
others or any other available means.

DOMINANT-HYPOTHESIS REASONING
Dominant-hypothesis reasoning (DHR), is a particular strategy that applies to complex
situations. In these cases, there may be several possible causes for the situation and
significant uncertainties may be associated with both observations and understanding of the
nature and mechanisms behind it. We find such situations all around us. For example, they
are present when we deal with markets and customers, employees, production process, and
the general economy. Dominant hypothesis reasoning has received attention within the field
of medicine, where it is important to reason with complex situations quickly and with minimal
chance of arriving at wrong conclusions -- be it false positive or false negative.1
Dominant-hypothesis reasoning postulates the potential causes as hypotheses and then, for
each, identifies how much of the situation can be explained by it alone. The hypothesized
cause that accounts for most observations is considered dominant and chosen to explain the
situation.
A typical medical example is when a physician diagnoses a patient with skin rash, fever,
aches, sore throat, and so on, and also knows that measles have been diagnosed in the
community. The physician may consciously or tacitly match the patterns of the patient’s
symptoms with those for measles and similar illnesses and reach the conclusion that all the
symptoms can be accounted for by the measles hypothesis -- which also is supported by the
other occurrences of the illness. If the symptoms could also be explained by a combination of
acute allergy and a flu, that conclusion would not be considered by the physician since it
would be less likely and, therefore, discarded.
People appear to use case-based reasoning to generate the hypotheses they explore.
Research indicates that both proficient performers and beginners use experience, in the form
of reference cases, to form hypotheses. This is quite powerful since they not only use their
own reference cases but also ask their peers and mentors for potentially applicable cases.
Dominant-hypothesis reasoning is far from fool-proof, however. As in medicine,
observations may show individual variations, other plausible causes may generate the same
observable outcomes (symptoms), and there may be more than one root-cause (independent
variable) influencing the situation.

1 A false positive conclusion refers to concluding that a condition exists when in fact it does
not. A false negative conclusion means concluding that a condition does not exist when in
fact it does.
Thinking and Reasoning 259

MOST-IMPORTANT FACTOR REASONING

Don Halber, Faxco’s Vice President of Marketing, is asked to provide a conclusion to the
board explaining why Faxco is lagging its competition in wheelbarrows. He knows that
many factors play a role: the price of Faxco’s wheelbarrows is a little higher than
average; the quality is good, but not tops; Faxco has at times not been able to ship when
promised; the new wheels were late to hit market; and the sales force has not been well
motivated and has not promoted wheelbarrows vigorously. There are other factors as
well, but Halber thinks that the major factor that really needs to be considered is the sales
force motivation. He sets the other factors aside and proceeds to outline why and how
motivation affects wheelbarrows and how that should be remedied.
In most-important factor reasoning (MIFR), we consciously analyze the situation and use
our best judgment to determine which factor we consider to be most important, the factor that,
if changed, will impact the situation the most. By setting all other factors aside, we can reach
a quick conclusion with minimal expenditure of time and effort.
Many teachers of business administration have advocated that managers use MIFR to
become effective decision makers, that is, cut through irrelevant complexity and quickly
arrive at a conclusion. That approach may be appropriate for experienced and knowledgeable
managers in situations they are familiar with and where they have developed reliable
judgments for relatively simple situations.
However, senior business commentators and analysts now consider this approach to have
inherent flaws -- even dangers. To use MIFR properly, the analyst must be able to judge that
it is an appropriate approach for the situation at hand. In the hands of relatively inexperienced
professionals, MIFR has led to inappropriate and costly conclusions. Many have either not
been able to judge which factor was most important, or more often, have simplified important
and complex situations to the point that the analysis no longer represents the actual situation.
In many instances, multiple factors need to be considered simultaneously to yield appropriate
solutions. We see examples of this requirement in customer service expediting, logistics,
facilities expansion, pricing, personnel situations, joint venture analysis and
recommendations, and in many other important situations.

Complex Reasoning Approaches

Frequently, we need to consider important situations from rather comprehensive and
realistic perspectives requiring a broader representation of relations, factors, and objectives.
That typically also requires more complex approaches to reason about the situation since
idealized and simplifying reasoning strategies are not sufficient. Some of these complex
approaches have to be learned since in contrast to the deductive, inductive, abductive, and
analogic reasoning approaches, they are not part of our “inherited repertoire.”
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TEMPORAL OR DYNAMIC REASONING

Mary Paw, product manager for ASCO’s skincare products, is worried that the market
penetration of Isolde, the new cleanser, will be too slow. She has prepared a market
introduction program with specific dates for ads in journals and on TV, store
demonstrations and sales support for the major chains, and new product promotions and
give-aways. All is on schedule. Yet, given the present market, she projects that customers
will react slower than normal. In particular, Mary is afraid that stores will respond to
ASCO’s promotions by ramping up their efforts over two months instead of three weeks,
which used to be the case. In addition, she fears that given the competitive products,
customers may react slower to Isolde than ideal -- perhaps over a three-month period
instead of the normal two. She also weighs in her mind how many customers will be
influenced directly by her ads and how many will be influenced by the stores. She tries to
sort out, once again, the complex interaction between general advertising and store
displays.
The issue is further complicated by the fact that customers and stores change their
response when they see how well the product catches on. Finally, the whole issue is
compounded by the evolution of the situation and Mary’s concerns with the speed of
product acceptance as much as with the final market penetration.
We use temporal or dynamic reasoning often. We use it in complex situations like Mary
Paw’s (illustrated schematically in Figure 7-3), as well as in simple, straightforward situations
when we change lanes on the freeway and project if we have enough time before the fast car
behind us catches up.

Figure 7-3. Mary Paw’s Temporal Reasoning Paradigm.

Secondary
Customer
Response
Customer Desire to
Try Product
Advertizing & Promos
0 1 2 3 4
Months Customer
Initial Purchases

Customer
0 1 2 3 4 Response
Customer 0 1 2
Months
3 4
Months
Purchasing
ASCO's Behavior
Marketing Initial Store Market
Actions Response Response

Stores Assignment of
Shelf Space & Personnel
Secondary
0 1 2
Months
3 4 Store
Response
Thinking and Reasoning 261

In our professional and daily life, however, we find that many shy away from temporal
reasoning. They do not pose the problem as comprehensively as Mary did, nor do they look
at the evolution of the condition over time. Instead, they seem better able to cope with
situations where quantitative changes are expected in variables such as increases or decreases
in demand, population, and so on. In more complex situations, however, most people appear
erroneously to prefer to focus on static, snapshot views when the basic nature of the situation
is dynamic and is expected to change significantly over time.
We do not know if the propensity to consider the evolution and dynamics of abstract
situations is an inherited trait or a learned capability. We do know, however, that we have the
capability to reason temporally with physical systems from early childhood, as evidenced by
our capability to handle the physical world around us. We manipulate objects, we walk, we
run, and we operate cars on the freeway. All of these activities require considerable physical
dynamic reasoning.
Abstract dynamic reasoning, though, may be different. Thus, many people have difficulty
thinking about dynamically evolving situations, choosing instead to concentrate on what best
can be described as static scenarios. That is, when seeing a particular situation, they do not
consider how it may change from one instant to the next.
Frequently, people prefer to only consider stationary scenarios when planning for
implementation of a new capability that will lead to changes in behavior or environmental
conditions, such as the installation of a new computer networking system. In several cases,
we have observed that implementers plan according to a scenario that is fixed in time the
instant the new system comes on stream. Therefore, they neglect to take into account how the
new environment will affect future use of the system in terms of new practices and,
importantly, as a result, they neglect to build capabilities into the initial system that make
possible future changes to support desirable evolution.

Reasoning with Causal Event Chains

Reasoning about cause-and-effect conditions is closely related to temporal reasoning. We

use mental models in both cases to project outcomes, effects, that will result from perturbing
the causal system and changing the conditions to cause the system to behave in a particular
way. Reasoning with causalities is often very complicated. Our mental models may be
highly qualitative and approximate, even when they are correct, but existing cause-and-effect
relations are highly precise and often sensitive to minute changes. This is the case with
physical systems that we can observe such as when two billiard balls collide. It may be less
true for “forgiving” or partially adaptive systems such as the effects of under- or overwatering
the lawn.
Many causal systems consist of several links in a chain from input cause to end-effect.
Reasoning with multiple-link event chains can be complex and error prone since the outcome
of one link becomes the input for the next. This is illustrated in Figure 7-4 for a situation
where a conclusion must be generated about adding an additional expert buyer in the men’s
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department in a warehouse.
In business, we often deal will causal systems that are not well understood: our production
processes; customer behavior and product acceptance; human behavior in personnel matters;
and so on. In these cases, we are asked to reach conclusions that will enable us to act in some
way based on our imperfect and qualitative mental models. Unless we have deep insights and
well developed judgments, we may make mistakes when we reason about these kinds of
situations. If several people are involved, we often find broad differences of opinions and
judgments, often deep disagreements, as a result of each individual’s imperfect mental
models.

Figure 7-4. Simple Example of Use of Event Chains to Portray End-Value Benefits in
the Men’s Department.
Larger
Larger Increased
Increased
Sales
Sales Sales
Sales People
People
Improved
Improved Volume
Volume Satisfaction
Satisfaction
Improved
Improved
Quality
Quality of
of Customer
Customer
Men's
Men's Wear
Wear Satisfaction
Satisfaction Reduced
Reduced Increased
Increased
Cost
Cost of
of Customer
Customer
Goods
Goods Sold
Sold Loyalty
Loyalty
Add Expert Greater
Greater
Buyer in Confidence Buy
Buy Larger
Larger
Confidence
Addition to That Order
Order Larger
Larger Risk
That We
We Buy
Buy Quantities
Risk Increased
Increased
Joe Best Quantities of
of Unsold
Best Lines
Lines Unsold Sales
Sales
Inventory
Inventory Volume
Volume

Increased
Increased Increased Increased
Increased Increased
Initial Payroll
Payroll Personnel
Personnel Department
Department
Activity Costs
Costs Profits
Profits

Direct
Positive Effect
Negative Effect
Effects and Intermediate and Indirect End-Value
Benefits Effects and Benefits Benefits

NONMONOTONIC REASONING

Mary McAllister is a senior group health underwriter at Enigma Insurance. She is

working with OXXO on their policy renewal. She has collected their past claims history,
employee demographics, and other relevant information. Based on available information,
she has generated hypotheses for expectations for OXXO’s claims over the next policy
period and has calculated the corresponding contract terms. In performing this work, she
was missing some information on recent claims and on changes in the health care delivery
system and practices at OXXO’s plant locations. When that information became
available, Mary discovered that significant changes invalidated some of her prior
reasoning. She was forced to backtrack in her analysis to generate new hypotheses for
expected claims and risks to calculate new proposed policy terms.
Mary’s situation is typical. We frequently start to reason based on what we know, perhaps
even with information that we know is incomplete. Later we discover that the situation is
different from what we first thought and that we need to revise our understanding and
reasoning premises. Our reasoning cannot progress monotonically. We need to regress to a
Thinking and Reasoning 263

point where our premises are valid and start our reasoning anew from that point in a new
direction. In other words, our reasoning is nonmonotonic. Many people have a much easier
time with reasoning nonmonotonically than others who sometimes even feel that it is an
affront to have to change reasoning direction! These “linear thinkers” might actually refuse to
change reasoning direction even in the face of very strong evidence.

REASONING BY DEFAULT
Nonmonotonic reasoning frequently occurs as a result of reasoning by default, which is
prevalent in commonsense reasoning. In ideal reasoning situations perfect information is
available, it is accurate, complete and congruent. That is, the facts and the relations between
facts and premises are in perfect correspondence. In such situations, conclusions can be
generated using standard logic or other straight forward reasoning strategies.
Real life, however, is usually more complicated. For example, relevant and available
information may make it reasonable to presume that some conclusions can be substantiated
but cannot be supported directly using logic. The available information may be partial or
incomplete, or may pertain only indirectly to the conclusion of interest, relating instead only
to a closely analogous condition. In these situations it is not possible to reach conclusions
using standard logic. As alternatives, people draw inferences from patterns to permit them to
generate conclusions that do not follow strictly from premises given the available information.
In other words, they default to the best reasoning approach they feel comfortable with. As
indicated, default conditions are found in many case-based reasoning situations when
representative reference cases with embedded experience and judgments are used. Reasoning
by default may, at times, lead to inappropriate conclusions that need to be revised when more
complete information about the situation becomes available as indicated for nonmonotonic
reasoning.

PLANNING
Joe Palmer is planning a project to expand his store into the adjacent suite. He has
generated a list of all the major tasks that need to be performed such as constructing a
new entrance and passage way, interior decoration, procuring store and point-of-sale
(POS) equipment, ordering and receiving more merchandise, and advertising. He does
not yet know the best sequence in which to proceed and has not received final bids from
contractors with their schedules. He cannot wait for all information to be in hand before
initiating the project since some items to be procured require long lead times.
Joe reasons that he needs to place the long-lead-time items on order right away so they
will be available when he needs them. If they arrive earlier than needed, he can easily
find temporary storage for them. Since the additional merchandise can be delivered
quickly after it has been ordered and since it is quite expensive, he will wait to order until
he knows precisely when it is needed. He also may need to hire additional help, but
figures that it can wait too until it is absolutely clear that the need is there since there are
many well trained people looking for jobs. The advertising project should also be started
soon. In the past Joe has waited too long to initiate advertising and has been forced to
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rush through half-baked ideas that he was not too pleased with. Given this situation, Joe
makes a list of those tasks that he needs to do immediately and another list consisting of
items that can wait.
We plan many times every day. When we figure out what we will do next, which route to
choose to work, what to buy at the store, and how to attack the next work task, we plan. We
identify steps to be taken, the sequence of the steps, and what each step will contribute
towards reaching our goal.
Planning is a complex set of reasoning tasks that require (a) information on the initial state
of a situation, (b) a set of potential actions for changing the situation, and (c) the goals for
what we try to achieve. Planning requires reasoning with causal event chains, frequently
under uncertainty. Typically it also involves nonmonotonic reasoning when the unexpected
happens. This is particularly likely since our planning takes place before the actual event
while much of our information consists of imperfect conjectures of what the future will bring.
When people plan without using computerized planning models that can handle large amounts
of precise information, they use qualitative and fuzzy reasoning. These approaches allow us
to handle very complex simultaneous conditions and events in our heads, while also allowing
us considerable flexibility for considering alternatives.
Planning consists of more than reasoning, however. It is primarily a problem-solving
activity. A considerable, perhaps the most important, aspect of planning deals with
synthesizing the nature of potential steps that may be executed to achieve the goal. This
aspect of planning is creative and also constitutes an important building block of the more
complex approaches to decision-making.

Directing a Dialog: A Special Kind of Planning Ahead

We plan ahead whenever we attempt to guide a dialog or a discussion in an exploratory,

educational, or influencing situation, or when we attempt to direct any other fast-paced
evolving situation. By planning ahead, we identify what our next options and potential steps
are likely to be and perform our immediate actions to steer the situation to where we want it to
go. Planning ahead in this manner requires a special kind of reasoning and relies on idealistic
and systematic knowledge in addition to being able to “read” the current state of the situation.
It is particularly important to understand this kind of reasoning and its requirements when
we provide reasoning support (by for example providing Decision Support System (DSS)
applications) to knowledge workers who deal with fast-paced processes. To perform their
functions competently, they will need to possess sufficient idealistic and systematic
knowledge (particularly conceptual and Expectational knowledge) in their minds to be able to
plan ahead and guide the situation. Additional knowledge -- often factual and methodological
-- can be supplied by DSS applications. Effective DSS support depends on the degree to
which knowledge workers’ can obtain and incorporate the external knowledge competently
and timely to match the demands of the fast-paced situation -- often within a fraction of a
second.
Thinking and Reasoning 265

REASONING WITH MULTIPLE HYPOTHESES -- “BLACKBOARDS”

Dick Morse is troubleshooting a situation where a major order was lost, possibly on
price, to a competitor known for unreliable quality and mediocre customer service. He
works with the sales manager before visiting the customer. The sales manager indicates
that preproposal discussions with the customer reflected concerns about price, product
quality, and delivery consistency. Dick finds that the proposal was priced to yield
average profit, assumed only standard expenses. The price was reasonable but could be
underbid by an aggressive competitor. The proposal specified the company’s standard
product quality assurance procedures, which did not look very impressive on paper but
had worked very well. Statistics of delivered quality over the last year were not included
although they were available and of considerable company pride. The only mention of
delivery consistency was buried in the middle of a paragraph, even though the company’s
record was impeccable. Dick was baffled. He did not know which of the three factors, or
which combination of them, had caused them to lose the order. All seemed to be good
reasons. As a result, he wrote up a tentative analysis of the three factors, giving the
reasons why each could be the root cause leading to the loss of the order. With this
analysis in hand he visited the customer to receive better information.
Dick developed and pursued several hypotheses to identify what happened. He
documented them on a “blackboard” until he obtained further information that allowed him to
strengthen one hypothesis or eliminate another.
We often work with situations that provide conflicting and ambiguous evidence. In these
cases, we have to work towards conclusions while maintaining several plausible hypotheses
simultaneously as the reasoning situation unfolds. When we reason in this manner, we keep
the hypotheses in mind, on paper, or “out on the table” while we search for further evidence.
Since the world constantly changes, we must often reason in real time to understand what is
happening and be able to arrive at a conclusion before it is too late. This is the case when we
drive in the dark, operate a chemical process, or participate in a complex discussion or in a
fast-moving competitive sales situation. In all these instances, we maintain a “visible
blackboard” with the plausible conclusions in our mind, or on physical devices such as an
actual blackboard or a piece of paper.
Multiple-hypotheses reasoning relies extensively, as do all complex reasoning approaches,
on simpler reasoning strategies. In addition, multiple-hypothesis reasoning normally involves
reasoning under uncertainty and frequently becomes nonmonotonic.
Research indicates that human language comprehension requires support by reasoning
with multiple hypotheses and extensive use of complex concepts. When we listen to speech
or read and reason to understand what is being communicated, we need to consider several
competing hypotheses generated by concept associations and concept hierarchies. We use
these hypotheses to identify what is meant while we receive one or more sentences and
interpret them in context with the larger message. Use of multiple hypotheses is apparent
when we deal with ambiguous sentences, but it is also the case in all but the simplest
communications. People also have widely differing capabilities to handle complex verbal
communications. It should be noted that a small percentage of high performing knowledge
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workers -- who may have unusual strengths in other areas -- actually are language-learning
disabled with problems performing complex language comprehension tasks on par with the
rest of us.1

Highly Complex Reasoning Approaches

A large repertoire of highly complex reasoning approaches are available to us. Many of
these we cannot execute in our minds since they require processing speeds and memory for
detailed conditions that far exceed human capacity. Therefore, we use computers. That
allows us to reason about (or “solve”) problems of extreme complexity and great importance.
Some of these approaches are based on heuristics, others on logic, yet others on mathematics.
New commercial approaches are even based on semantic or conceptual reasoning that now
allows us to deal with reasoning about types of situations that we previously almost did not
know existed.
All these approaches are designed to explore and analyze complex domains in various
ways. Some will arrive at a conclusion (or solution) that satisfies a specified goal such as
“what is the minimum monthly cost of operating our distribution system? -- And what are the
precise operating configuration that will make that possible?” Others can support explicit
logic reasoning and provide verbally phrased advice on how to evaluate or consider the
condition of interest based on explicit expertise embedded in the system. A few
representative examples of the large number of such reasoning systems are presented in
Table 7-3.
The approaches presented in Table 7-3 were primarily made possible by the computer, but
are significant extensions to the expert’s mind and increases our capability to reason about a
situation. These systems have been developed by disciplines such as mathematics,
management sciences, operations research, computer sciences, and artificial intelligence.
Most of these approaches rely on many simpler strategies such as numerical analysis methods,
search strategies, and pattern recognition. The approaches are very powerful and have made
it possible to find conclusions leading to annual savings of billions of dollars in the U.S.
alone.
Use of these highly complex reasoning systems, however, require special training and
most knowledge workers are either unfamiliar with them or when merely acquainted with
them, may consider them too cumbersome or difficult to use. As a result, complex situations
frequently are not treated comprehensively and are not properly reasoned about or analyzed.
Instead, knowledge workers who lack this knowledge will use simplifying approaches that are
more familiar to them, often with significant opportunity loss.

1 Personal communications with Professor Elisabeth H. Wiig, (1993).

Thinking and Reasoning 267

Table 7-3. A Few Highly Complex Automated Reasoning Systems.

Reasoning System Characteristics
Mathematical Reasoning identifies conditions that best satisfies specified goals
Programming by observing constraints & other relations between independent
(LP, MIP, variables. Constraints may be static constraints (Linear
Dynamic Programming) Programming and Mixed Integer Programming) or causal event
chains (Dynamic Programming).
Provides probabilistic reasoning about complex, often dynamic,
Monte Carlo Simulation situations by repeated simulations with large numbers of equally
probable input scenarios that generate a family of equally probable
output scenarios which characterize the universe of plausible
futures.
Uses explicitly represented expert knowledge to reason with
Knowledge-Based formal logics (First Order Predicate Logic, Fuzzy Logic, and so
Systems on) to generate conclusions about particular situations or
conditions. Knowledge may be represented in the form of “Rules”
or in other declarative forms. Reasoning may be deterministic or
probabilistic.
Document Summarizing Uses natural language understanding to reason about concepts in
texts and provides summaries of these concepts from the user’s
perspective.

We Often Use Special Tools to Support Complex Reasoning

We have many powerful tools to support complex reasoning. One such tool is the whole
field of mathematics that essentially has been created to reason explicitly about very complex
situations that otherwise would be beyond our grasp. Other tools are the field of statistics,
formal logic systems such as Boolean and Fuzzy algebras, graphical approaches such as
vector diagrams, and many other approaches.
All these tools allow us to characterize and manipulate often very complex situations and
conditions, reason about them in ways otherwise not possible. We frequently use these tools
to analyze conditions and synthesize approaches to handle them.
Most of these tools require considerable systematic and pragmatic knowledge and
understanding to be used. In order to know when and where to use them -- to make a decision
that it is desirable and what the associated advantages and disadvantages are -- requires
idealistic and systematic knowledge with emphasis on both conceptual and Expectational
knowledge.
268 Knowledge Management Foundations:
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Goal-Directed Reasoning, Proxy Beliefs, and Developing

Judgments
Frank Hauser, Oxxo’s fertilizer plant manager, oversees a major plant refurbishing
project. It is well-planned and progresses smoothly with the total plant shut down. There
is considerable pressure to complete the project early since there is an increasing backlog
of orders to be filled. Frank is suddenly informed that when opening the large
compressor, it was found that the rotor has a hairline crack in the shaft.
Frank immediately projects in his mind what the implications of the crack could be. His
goal is to satisfy the demand for product as quickly as possible. He thinks the
compressor could be made to operate at reduced power for “some while” although the
rotor ultimately must be replaced. Based on his objective -- to get the plant operational
quickly -- he poses premises regarding the different conditions that he knows exist and
that may result from the present situation. He uses deductive reasoning to identify what
will obtain under these conditions. Using inductive and abductive reasoning he also
poses tentative hypotheses for what may happen if he chooses one action or the other.
Since his goal is to find the best way to bring the plant into production as quickly as
possible without risking premature shut-downs, he directs his reasoning by focusing on
generating options that will allow him to reason about, explore, the consequences of these
alternatives.
Much of the reasoning we perform is directed by our goals and values. In most
circumstances, goal-directed reasoning is part of problem-solving as we discuss in the next
chapter. But we all are repeatedly faced with new conditions that may impact our goals.
Whenever that happens, we start to reason about what the impacts may be and generate
options for how to deal with the new conditions.

REASONING AND SEARCHES

We often reason to search for conditions that are of particular interest. We may for
example “search” for the shortest (i.e., optimal) route by car from St. Louis to Omaha by
analyzing a number of possibilities. If we look broadly at the map and identify ten roads that
may be reasonable first legs, we are performing a “breadth-first” search. That is, we identify
ten roads that all seem to point towards Omaha and may seem equally good until further
information is obtained. The next step may be to look at several second-leg options for the
best first legs. This way we explore the “search space” to identify the best single route. By
limiting the number of first legs to the two or three “best” options, we may reduce the search
space to a manageable number of options. We “prune” the search tree (narrow down the
“solution space”) by eliminating options that appear less desirable by some criterion.
Instead of a breadth-first search, we may conduct a “depth-first” search. In that case we
may initially chose a first leg by some measure, perhaps the shortest, or the one pointing in
the general direction of Omaha, or completely at random, then the shortest second leg (if that
Thinking and Reasoning 269

is our criterion), and so on, until we have reached Omaha. We then may explore a second
route and continue the process until we either are satisfied that we have explored all good
routes or have exhausted all possible routes. In most real problems, the total number of
alternatives is prohibitively large, forcing us to reduce the search space. When a person
performs a visual search of a simple problem such as the one indicated here, the process can
often be shortened since the human pattern-recognition process allows quick screens of the
available options. In all these cases, unless we perform an exhaustive search of a “feasible
space,”1 there is no guarantee that we have found the shortest route.
Human pattern recognition, however, is not infallible and quickly becomes unable to deal
with problems when these become complex. As example, the “traveling salesman” problem,
which asks for the shortest route for visiting multiple cities, is notoriously difficult for
humans (and also for computers) to solve.

WE CREATE “PROXY BELIEFS” WITH OUR MENTAL MODELS

George Sweany believes that it is vital for our global future to keep the ocean’s food
chains healthy and at peak production. George has become concerned about the amount
of untreated sewage, pesticides, chemicals, heavy metals, and high nitrogen farm run-offs
that we dump into the ocean. He is concerned about the effect that all these substances
have on the ocean’s flora and fauna. He bases his concern on the mental models he has
built from his understanding of how the chemicals migrate from link to link in the food
chain. He has developed mental models for how some of the chemicals affect species
adversely and has interpreted reported laboratory experiments and field observations to
create other mental cause-and-effect models for the effects of the other pollutants.
George uses his mental models to project the overall physical effects of the annual
pollution load on the biota in the ocean and comes up with the conclusion that the biota
and, therefore, the food chain will be very badly affected as time goes by. Based on this
personal projection, which impinges directly and negatively on his belief for the food
chain, he transfers the conclusion to create a new belief -- a “proxy belief” -- directly
associated with the rate of pollutants that are discharged into the ocean.
George is emphatic about the seriousness of the pollutant discharge situation and focuses
strongly on the actual amounts and concentration of each substance. He does not give a
second thought to the fact that his interpretations -- his projections of the effects -- are
fully a function of his personal reasoning with his internalized mental models. And these
models are qualitative, perhaps questionable in their correctness, and not open to
scrutiny. Yet, George has become a strong public advocate to avoid pollution based on
his subjective views.
Peter Vaughn also believes that it is vital for our global future to keep the ocean’s food
chains healthy and at peak production. Peter has also built a set of mental models of the
effects of polluting the ocean based on some of the same information that George has.

1A “feasible space” is a relative concept; in this case, it is constructed after the length of a
known route has been determined. Given that length, it is possible to identify a locus beyond
which all routes will be longer and hence infeasible. The feasible space falls within the locus.
Each time a shorter route is found, the feasible space is reduced.
270 Knowledge Management Foundations:
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Peter, however, has a different background. Whereas George was educated as a

biologist, Peter is an economist, which gives him a different mental framework. Peter’s
mental projections, from the same discharge statistics that George uses, indicate that
although there will be adverse effects, these will not be serious and the regenerative
capabilities of the ocean make it possible for it to process much greater pollutant load
than it now is receiving. Peter also transfers his conclusions to a proxy belief that all is
well, as long as we discharge at the present levels. Peter’s mental models are also not
accessible and are also largely based on interpretations and sparse knowledge.
Peter and George are in a constant battle over the need to reduce specific pollutants with
no end in sight. They argue publicly about the inadequacies of particular regulatory
proposals, treatment plant capacities, and similar issues -- all based on very different
proxy beliefs about impacts. Even though they share the basic belief about food chain,
they do not (yet) attempt to obtain better projections and models of the event chains from
pollutants to end-effects, and instead rely only on their pre-established subjective models.
We all have basic personal beliefs and values that govern our lives. Some are associated
with self-preservation, others may be egalitarian, others still may be spiritual, and so on. In
addition to our basic personal beliefs, we also hold fundamental beliefs associated with our
work, such as the belief that the enterprise will go under if we cannot make acceptable profits
over the long run or that customers will stop buying our products if we consistently overprice
them and produce low quality.

Figure 7-5. Using Mental Models to Develop Proxy Beliefs.

Mental Model
Mental Mental
Observations Model for Model for
Link # 1 Link # 2
Intermediate
Outcome

Potential Projected
Scenario Outcome

Proxy Belief Transfer Resulting

Associated Association Value of Compare
with Scenario of Belief Outcome

Basic Beliefs

We use both basic and fundamental work-related beliefs to generate judgments and
“proxy beliefs” that we use in reasoning situations to analyze if a hypothetical condition will
be acceptable. We first generate proxy beliefs associated with existing situations or potential
scenarios by using our mental models to project what we believe the outcomes will be. Then
Thinking and Reasoning 271

we compare the believed outcomes with the values that we hold for those kinds of situations
and immediately associate the value judgment of the outcomes with the initial hypothetical
condition. Finally, we transfer the value belief for the outcome to become a proxy belief for
the initial condition. This process is illustrated in Figure 7-5. In this figure, we have
indicated how we develop proxy beliefs from basic beliefs and transfer them to be associated
with the potential input scenario.

On Developing Positive Judgments and Associations

We constantly develop new judgments as a result of new experiences. While our

judgments clearly can result from learning directly from our experiences, they can equally
well result from reasoning. Particularly, they can result from reasoning about cause-and-
effect situations and are then closely related to proxy beliefs. The judgments that we hold are
almost always judgments about the value impact of expected outcomes that are associated
directly with experiences or indirectly from proxy beliefs. Statements that indicate judgments
based on work-related values can be of the following type:
“In my judgment, you should invest as much of the surplus as you can to refurbish your
production line. But don’t take out any new debt to do it.”
“I judge that the best way to fix this car is to change the whole transmission instead of
trying to repair it.”
“I think that there is no appreciable risk associated with this situation.”
“My judgment is that increasing the price of our wheelbarrows now will result in
drastically reduced sales.”
These statements illustrate judgments that have been developed from different processes.
The two first seem to be based on direct experiences while the two last are based on complex,
perhaps hypothetical, mental models.

On Negative Judgments

The points indicated above deal with developing positive judgments from knowledge and
experiences. Too often, we find negative judgments and biases -- outright suspicions -- that
result from lack of knowledge. We see this trend in society where we find fear and hostility
between different religious or ethnic groups. To a much smaller extent -- but still very
damaging -- we find suspicion and distrusts between professional groups within the same
organization. Marketing people may distrust manufacturing staff, customer service
representatives may be suspicious of the motives of the accountants, and so on.
Experience shows that when individuals learn more about those they distrust (when it is
caused by misunderstanding and misinformation rather than self-serving or evil behavior),
their distrust and suspicions tend to disappear and instead a basis for cooperation and
collaboration emerges. Such development is very important in any organization and indicates
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that it is very important for groups to share understandings of each other. It is important
based on the value of reduced internal friction. It is even more important that the different
groups understand how to draw upon, rely, and trust expertise in other groups when that is
relevant. We will discuss some of these aspects later when we consider how teamwork and
collaboration are fostered.

Creating Mental Models to Establish Associations

We are always approached by people who want to influence us and have us adopt their
point of view. This happens in our work, in social situations, in advertisement, and when
someone wants to change public opinion. In all these situations, one of two basic techniques
is used. The most simple technique is to make us accept a particular association without
understanding why. Many of these unfounded associations are powerful and become etched
into our minds so that they may even influence our decisions without us knowing why. Some
of us can clearly remember a not so healthy association from many years ago: “Camel tastes
good like a cigarette should!”
A different and more complex approach is taken by people who wish for us to change our
minds on a deeper level. At times we may, of course, be manipulated, but generally this is the
standard approach we use to communicate legitimate and valuable knowledge and insights to
others. Most wish for us to understand and know what they know and believe and for us to
create mental models that reflect their objective and impartial knowledge.
Others wish for our new models to support their subjective position, thereby establishing
associations (or proxy beliefs) in our minds that will make us believe and act in the way they
desire.

The Strength of Our Arguments Rests Directly on How Well Integrated and Connected Our
Knowledge Is

When we are subjected to external influence, or when we try to influence others, the
strength of the argument is a direct function of how congruent our knowledge is and how
much abductive reasoning we require to reach the desired conclusions. If our argument is
weak, we tend to use extensive abductive reasoning. When our knowledge is incongruent and
disjointed, we may try to compensate by using analogic reasoning. In both cases, our
audience may have difficulties understanding precisely what we mean and how we arrive at
our position. And if they wish to disagree, we give them ample opportunity to disprove our
arguments by either choosing associations that are different from those we use or by directly
attacking the associations we used.
Thinking and Reasoning 273

Some Observations
THE PSYCHOLOGICAL COSTS HAD BETTER BE BELOW BENEFITS!

In situations where people are asked to learn new ways, where change is asked for or
where new tasks are to be performed, there is bound to be resistance. It is imperative that the
individuals involved and, when applicable, the organization, are given the opportunity and
incentives to learn and internalize what they need to know about the new approaches to such
an extent that it is not an elaborate conscious effort to apply them. The “psychological cost” -
- the mental effort -- required to learn and use the new approaches must be less than the
perceived benefits. If costs are greater than benefits, the new approaches will not be applied.
Adopting new approaches requires three things:
1. Deep understanding of the new knowledge (while rote learning helps ensure efficient
application of the new approaches, it is very inflexible and does not easily provide the
capability to change, continue to learn, or be innovative)
2. Repeated practice to become familiar with, and internalize, the new approaches to the
point where they become “second nature” or automated working knowledge
3. Clear understanding and acceptance of the benefits associated with changing to the new
ways with particular emphasis on personal benefits, both short- and long-term
Whenever we have a personal situation that requires action of a somewhat unfamiliar
nature, there is a psychological cost associated with it. If the individual is not familiar, or at
ease, with how to approach the process involved -- if it is not “second nature” -- the
psychological costs may be relatively high. The costs are associated with anxiety,
overcoming uncertainties, the effort required to determine how to carry out the process, the
potential for failure if something goes wrong (i.e., stress), and the extra mental effort required
to perform reasoning tasks that are not intimately understood.
The situation is very similar, albeit on a larger scale, when unfamiliar tasks such as
different professional approaches or new methods and procedures are introduced into an
organization involving many people. Unless relatively clear procedures for how to approach
the new practices have been defined and unless each individual involved has internalized the
new approaches and understand clearly what is required of her/him, the psychological costs
may be so high that people -- and hence the organization -- will refrain from implementing
them.

Is It Lethargy, Mental Laziness, or Cognitive Reluctance?

At some time, we all exhibit hesitation, reluctance, or even procrastination when faced
with a mental task. At times, we will consider such behavior to be mental laziness, lack of
274 Knowledge Management Foundations:
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interest, carelessness, lethargy, or other not-so-desirable personal traits. What is going on

may be quite different, however for most people, complex tasks appear highly taxing and are
to be avoided when they do not know how to approach them. Although they may “in general”
know how to deal with such a task, under the actual circumstances they may find that they do
not have the required understanding and, in particular, may lack the necessary systematic
knowledge to know what to do, and particularly how to do it. Hence, they often choose to
avoid the task or simplify it to the point where they can proceed securely without exerting
more mental energy than they are comfortable with.
Providing knowledge workers with idealistic and systematic knowledge about the tasks
and how to approach them -- providing them with general and broad understanding in the
form of scripts and schemas -- in addition to pragmatic knowledge appears to help
considerably in reducing such cognitive hurdles. Thus, after providing people with deep
understanding, we normally see very low psychological costs associated with performing
well-understood tasks and approaches even when they are complex and require considerable
flexibility for dealing with variations from the normal or the nonroutine conditions.
 275

How Knowledge is
USED in Practice

Chapter 8
Solve Problems! Make Decisions! -- Use
Knowledge Creatively!

This Chapter
Knowledge professionals and knowledge-workers at all levels benefit from understanding
how problems are solved and decisions are made. Knowledge professionals need this
understanding to investigate and analyze knowledge-intensive activities and to suggest or
synthesize changes. Knowledge-workers, in turn, need it to organize work and understand
how their associates operate.
This chapter offers some perspectives on this large domain, drawing on the material
presented in all the earlier chapters. Specifically, it focuses on how we apply knowledge,
particularly how we solve problems and make decisions. We introduce the notions of
outcome oriented thinking and activities (OOT and OOA) and show how all problem-solving
is driven by external challenges in addition to internal knowledge. A general schema for
OOT is introduced with the roles of analysis and synthesis. Also, eight paradigms for
problem-solving behavior are discussed using examples.
The role of critical thinking -- central to quality decision-making -- is briefly discussed
and related to a script for problem-solving on-the-job. Top-down, bottom-up and other modes
of organizational decision-making are reviewed prior to a brief discussion of knowledge-
intensive work.
Reframing and creativity are then discussed as central aspects of excellent Decision-
Making, which is introduced by first examining “what it is” and then identifying what a
quality decision entails. Different kinds of decisions are introduced, including minor, major,
policy, and programmed vs. non-programmed.
Ten decision-making styles are presented with illustrating examples and a discussion of
some of the factors that influence decisions. The effect of expertise on quality decision-
making is illustrated and discussed. In conclusion, some decision-making practices and issues
are presented.
276 Knowledge Management Foundations:
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All the Knowledge in the World Is No Good If It Is Not

Used!
For all kinds of personal and business purposes, we gather and organize knowledge to use
it. We gather knowledge through learning and innovative discovery because we think we
need it, because we are curious, or just because we happen on it. As mentioned in the
previous chapter, we rely on knowledge to reason and think. More importantly, we use
knowledge to determine how to act and carry out our intentions, that is, to obtain what we
desire and to plan our approach. We use knowledge to attain the outcomes that we desire.
We think. We reason. We solve problems. We make decisions. We act. We use knowledge
to create change by transforming challenges into actions and incoming work products into
“finished goods.” All knowledge-related activities can be said to be performed for one
purpose -- and for one purpose only -- to create change!
Our knowledge -- our beliefs, associations, understanding, and mental models -- forms the
basic and energizing ingredient that allows us to perform as we do. Without knowledge, we
obviously could not do anything, nor would we want to. However, if we do not use the
knowledge we have, it is of no value to us and we might as well not have acquired and held it!
That applies to organizations as well as to individuals.

Outcome-Oriented Thinking and

Outcome-Oriented Activities
When people reason, they typically have a purpose in mind, instead of engaging in simple
association-driven daydreaming or other unfocused activities. When we think consciously,
our purpose is generally to attain an acceptable outcome for a particular situation, be it as
simple as how we may approach a swing door when walking with another person, or as
complicated as how to best take advantage of an unexpected and large monetary windfall for
our corporation. We engage in “outcome-oriented thinking” (OOT) for all kinds of reasons.
Most knowledge-intensive activities are oriented to generate desirable outcomes -- they are
“outcome-oriented activities” (OOAs).
In all purposeful activities, an objective, a criterion, defines the desired character of the
activity’s goal. Quite frequently, there are more than one objective. Several of them may be
in conflict and such constrained situations require complex tradeoffs that often can be difficult
to resolve and generally lead to situations where more important objectives are satisfied to
greater extents than less important ones.
We use OOT when we determine how to deal with important or interesting opportunities,
address challenges, solve problems, and make decisions or when we innovate to generate new
alternatives to old practices. Depending on the nature of the challenge and of our own
situation, we tend to use different methods to think about which outcome we seek and how we
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 277

may achieve it. The degree of attention -- the sharpness of focus -- that we apply, the urgency
that we are confronted with, the familiarity of the situation, and other factors influence how
we proceed in our thinking. We discuss some of these below.
Similarly, within organizations, we engage in activities that involve single individuals,
small groups, or large departments to attain specific outcomes. Again, these activities may be
sharply focused, splendidly coordinated or may be sporadic and unfocused. In some
instances, OOAs can be addressed implicitly in an organization without anyone being aware
that it takes place. In other instances, organizational approaches to OOAs are deliberately and
intentionally built into the organization’s structure, the arrangement of work flows, or the
particular responsibilities of departments and individual knowledge-workers. Other OOAs
are the permanent responsibilities of standing committees and taskforces. However, many
OOAs in organizations are not planned. They may be ad-hoc and approached by groups of
individuals in impromptu meetings or by informal networking, such as quick telephone calls,
meetings at the water fountain, or lunch table discussions. In general, though, the nature of
organizational OOAs and the manner in which they are handled are quite similar to the way
individuals approach them.
The effectiveness of how OOAs are handled in the organization directly determines how
intelligent-acting the organization will be. Hence, the effectiveness of the knowledge work of
individuals, the different structures that are created to perform problem-solving and
organizational Decision-Making are prime targets for improving the organization’s OOAs and
thereby its success.

Outcome-Oriented Thinking and “Problem-Solving”

In general language use, North Americans tend to lump all types of OOT and OOAs
together under the label of “problem-solving.” Since this label, albeit somewhat misleading,
is commonly used and understood by all, we will continue to use it throughout this book.
However, the realm of OOT is broad and quite different approaches are often appropriate to
address the different conditions we meet in real life. As indicated below, we may distinguish
between eight OOT paradigms that we frequently encounter and engage in.1

A GENERAL SCHEMA FOR OUTCOME-ORIENTED THINKING

Outcome-oriented thinking can be a deliberate and highly conscious exercise in which we

employ complex strategies that require that we consult with others, use computer-based tools,
and employ sophisticated methodologies. It may also be highly informal and nonconscious as
when we are hardly aware of how we think and organize our approach. In either case, we rely

1 Edward De Bono, the British originator of “Lateral Thinking” distinguishes between two
types of purposeful thinking: (1) “achievement thinking” and (2) “problem solving.” De
Bono (1992), Serious Creativity, p. 70.
278 Knowledge Management Foundations:
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on a similar schema for how to proceed in a situation that requires active involvement for
developing of approaches to achieve an acceptable outcome.1 The schema may be
summarized as follows:
Take Responsibility -- Accept Ownership
1. Accept responsibility for addressing the challenge.
Provide Initial Formulation
2. Make an initial characterization of the challenge or situation. What are opportunities,
threats, and requirements in terms of goals, constraints, and resources? What generally
seems to be the best direction of the approach that we seek to achieve the desired
outcome?
3. Explore what is already known about the situation and which additional or new
information can be obtained.
Analyze
4. To determine the nature of the overall situation, analyze the situation in greater and
greater detail until all subproblems represent known and understood entities . Throughout
this process explore how the perception of it might be reformulated or reframed to
obtain a “better” understanding. Does the initial characterization need to be expanded to
incorporate other perspectives and issues? Is the current understanding really the
problem, or is it a symptom of a different, deeper problem? Can the requirements be
changed? Are there alternatives?
5. Consider the situation from the different perspectives that are relevant and develop
corresponding characterizations.
Synthesize
6. Synthesize approaches, alternatives for how to deal with the situation, while
incorporating additional perspectives on broader issues like general acceptability of
approaches, potentials for unanticipated adverse impacts, and so on. Project advantages
and disadvantages for each alternative and identify the most attractive approaches.
7. Revisit the overall situation and problem-solving process to ascertain that there are no
omissions and that all relevant factors and issues are accounted for.
8. Subject the most attractive alternatives to reviews and reality-checks by self or others.
Decide
9. Select the best alternative and plan the approach it represents.
Close and Implement
10. Implement the chosen approach to achieve the desired outcome.
This general schema is illustrated in Figure 8-1, which also indicates typical iteration
paths that take place when additional analysis and synthesis are required. A particular and
more explicit and detailed example of this schema is indicated below where we present a
script for on-the-job problem-solving and learning. In that example, which also serves as an

1These steps are adapted from Simon (1976), Administrative Behavior; Halpern (1989),
Thought and Knowledge; and Janis (1989), Crucial Decisions.
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 279

illustration of organizational use of knowledge and knowledge building, we show how some
aspects of the general schema translate into more concrete activities.

Figure 8-1. General Schema for Outcome-Oriented Thinking.

Taking Responsibility
Accept to Address Challenge

Initial Formulation
Characterization -- Explore and Gather New Information

Analysis
Analyze in Detail -- Consider from Different Perspectives

Synthesis
Develop Alternatives -- Project Pros and Cons

Synthesis
See That All Aspects Are Covered -- Reality-Check

Decision
Select Best Alternative -- Plan Approach to Implement

Implementation & Closure

Make All Changes Implied by Decision

Our Beliefs and Biases Govern Our Outcome-Oriented Thinking! -- The Use of Proxy
Beliefs in Problem-Solving

Our decision-making and problem-solving are directly affected by our beliefs and
assumptions. We typically seek a particular outcome based upon our own or someone else’s
belief that it represents a desirable goal. These beliefs are always based on our mental models
of the world that are more or less correct. The outcomes we seek in a particular situation
invariably represent a step towards an end goal that is fashioned by our basic values. Our
actions are always designed to change a small part of the world, and the response we expect is
based on our models, however crude, refined, correct, or incorrect.
As discussed in the previous chapter, we constantly use proxy beliefs to set objectives for
280 Knowledge Management Foundations:
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our Decision-Making or to provide value judgments about potential outcomes or alternatives.

We do this as individuals, but we also do it as organizations, in which case the cultural aspects
and values play important roles.
We integrate our personal perspectives and goals with our goal-setting or idealistic
knowledge. Apparently, we first apply our idealistic knowledge and then temper our
interpretation of the situation with our personal objectives to arrive at the end-state that we
will pursue -- consciously or nonconsciously.

ANALYSIS AND SYNTHESIS -- DIAGNOSIS AND DESIGN

The manner and effectiveness with which we deal with outcome-oriented thinking and
related activities rely directly on how we analyze or diagnose situations to determine their
particular nature and details. Hence, the nature of analysis becomes of utmost importance
for the quality of the outcome. Subsequent to our analysis of a situation, we synthesize one
or several potential approaches to deal with it to achieve the desired outcome as close as
possible and we often cycle repeatedly between analysis and synthesis as we work with
alternatives for the situation.

After Sub-Dividing to Understand Details, We Need to Understand the Whole!

We analyze or diagnose1 situations to identify and explain what they represent, what
causes particular conditions, or to explore how different parts of the situation relate to and
influence each other. To analyze complex situations, we will partition them into smaller parts
or consider single dimensions or perspectives in isolation to examine and understand each part
separately. We employ such methods when we find that a our spreadsheet generates a wrong
column sum. We may find that we neglected to specify a term in the formula -- and once that
has been identified, we promptly fix it by adding the term. Once the smaller, partitioned sub-
problem is isolated, the decision of what to do with it could be obvious and might not require
particular thought.
However, a more complex problem tends to remain. After we understand the individual,
isolated sub-problems, we need to create an integrated understanding of the whole. This is
much more complex and requires an integrating “interpretative framework” that ties the
whole together to allow us to explore and understand -- i.e., analyze -- interactions and

1 It is often helpful to keep formal definitions of analysis and diagnosis in mind to be clear
about what we do when we “analyze”:
Analysis: “Separation of a whole [or abstract entity] into its component parts.” “An
examination of a complex, its elements, and their relations.” “Analysis is a process as a method
of studying the nature of something or of determining its essential features and their relations.”
Diagnosis: “Investigation or analysis of the cause or nature of a condition, situation, or
problem.“ Webster’s Encyclopedic Unabridged Dictionary of the English Language
(1989).
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 281

relations between the different parts and to see the business process from different
perspectives.

Daily Life Analysis

Most often in our daily life, we analyze the situations we meet without being conscious of
it and of the methods we use. We constantly analyze what we see, what we hear, what we
feel, what we experience, and what we understand is happening around us. Most of this
analysis is nonconscious and involves nonconscious reasoning ranging from pattern
recognition to case-based reasoning. We are masters at this and would not be able to function
fully without this expertise. Only when we need to employ non-automated knowledge or
when we decide to focus strongly on something, does the analysis become conscious and will
then often involve learned knowledge that we are able to use more or less expertly. This is
typically the case when we diagnose a malfunction or undesirable condition, or when we
analyze a business opportunity before we identify how we may approach it. In these cases we
rely extensively on two kinds of Systematic knowledge on: (a) how we expect the situation
and its underlying processes to function and evolve; and (b) methodologies for analyzing the
situations. We may also use powerful formal techniques to aid our analysis, although that is
relatively rare in daily life where we tend to be less formal -- and less effective.

Systematic Analysis

Organizations -- through the collected activities of individual knowledge workers and

teams -- often will analyze situations in much the same informal (and arbitrary) manner as do
individuals when the analysis is commingled with other activities. Such conditions arise in
situations when we suddenly are asked to substantiate a position or in many problem-solving
approaches such as “crisis problem-solving,” “exploratory problem-solving,” or even in
“innovative or creative exploration.” However, when we know that we need to analyze
situations deliberately for important purposes, we will adopt more systematic approaches. In
these cases we often will deal with group activities and various types of networking between
individuals, and the methodologies that we employ tend to be formalized and directed to
specific perspectives. We will for example, use financial analysis methods, work flow
analysis methods, industrial engineering methods, and so on. The discipline of statistics is
essentially created to apply scientific principles to analysis and a large number of methods
and approaches that use formal statistical methods are available for rigorous analysis. Such
approaches allow development of highly valuable insights into situations to interpret and
validate what they represent.
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We Synthesize to Create New Options

We synthesize or design1 when we determine “what is possible” and develop

alternatives for how to deal with situations. Synthesizing or designing alternatives involve
activities that we would like to be both innovative and creative. To obtain alternatives that are
not obvious, we must innovate, perhaps by assembling new approaches by combining
previously known elements in new ways. At other times, we must create new approaches
based on totally new perspectives and insights and we will discuss aspects of creativity in
later sections.

EIGHT PARADIGMS FOR OUTCOME-ORIENTED THINKING

We conduct outcome-oriented thinking in many ways and for many purposes. Some of
these ways are highly focused and require considerable mental efforts while others are less
formal and may not even demand conscious attention. Eight descriptive paradigms for OOT
that pertain to general approaches to challenges and ways of performing knowledge-worker
tasks and conducting businesses are:
• Leisurely and Unfocused Exploration -- “Give Some Thought to It”
• Crisis Problem-Solving -- Avert Disaster!
• Routine Problem-Solving -- Perform Competent Knowledge Work!
• Systematic Problem-Solving -- Find Quality Approaches to Special Challenges!
• Decision-Making -- Generate, Select, and Implement an Approach to Handle the
Challenge!
• Evolutionary and Incremental Problem-Solving -- Let Me Tackle That Problem When I
Get to It!
• Exploratory Problem-Solving -- Find out What Goes on and See If Anything Can Be
Done about It!
• Innovating or Creative Exploration -- Make What You Are Doing Better!
A summary of the characteristics and approaches of these paradigms is provided in Table
8-1. A more detailed discussion follows later.
The objective of identifying these paradigms is to explore how knowledge-workers
function when faced with different types of challenges. As professionals who will manage
knowledge-workers or as “knowledge specialists” we need to understand how people
undertake knowledge-intensive tasks and what some of their reasons are for proceeding in
particular directions. We also need to know the available options for performing certain types
of work and the potentials are for success.

1 Synthesis: “The composition or combination of parts or elements so as to form a whole.” “The

combining of often diverse conceptions into a coherent whole.” “Deductive reasoning.” “The
dialectic combination of thesis and antithesis into a higher state of truth.”
Design: “A mental project or scheme in which means to an end are laid down.”
Webster’s Encyclopedic Unabridged Dictionary of the English Language (1989).
 Solve Problems! Make Decisions! -- Use Knowledge Creatively! 283

Table 8-1 Characteristics of Outcome-Oriented Thinking Paradigms.

Paradigm Characteristics Approach
• Goals are often fuzzy, unclear, and • Mostly performed alone
Leisurely & qualitative if explicit at all. They may be • Unhurried & informal mental exploration
Unfocused tacit or implicit in the general situation • May disregard constraints & uncertainties,
Exploration • Constraints are not explicit be internally inconsistent, with approaches
• Performance criteria not explicit that partially satisfy criteria & objectives.
• Options, when generated & considered, Uses idealistic, pragmatic, automatic
are not made clear or remembered knowledge
• Options may be internally inconsistent • Relies extensively on associations & less on
crisp or qualitative explicit reasoning
• Sharp focus on what creates problem • Performed alone or in groups -- often with
Crisis • Satisfactory solutions are sufficient considerable urgency
Problem- • Situation may be very constrained by • Approach is often “what comes naturally”
Solving Time; Resources; Information; & rather than selected to match problem
Knowledge • Uses pragmatic & automatic knowledge
• Goal is to alleviate crisis
• Part of all regular knowledge work & • Mostly performed alone
Routine needed to complete all normal tasks • Often performed to analyze
Problem- • Frequently overlooked due to its ubiquity • Relies on pragmatic & automatic
Solving • Well understood by participant(s) knowledge & on known routine cases, less on
scripts
• Goal is typically to develop approach to a • Performed alone or in groups -- often with
Systematic challenge or produce a product considerable reflection & deliberation
Problem- • Group work may lead to disagreements • Often performed to generate alternatives
Solving due to diverse understanding • Relies on idealistic, systematic, pragmatic
• Situations are often only partially & some automatic knowledge
understood by problem solver(s)
• Goal is to produce a change or preserve • Performed alone or in groups with varying
Decision- status quo degrees of reflection & deliberation
Making • Focus is on finding acceptable way to • Often simplifies rather than vigilant
handle the situation & implementing it • Uses systematic & pragmatic knowledge
Evolutionary • Focus changes to present issues • Wait-and-see attitude to approach
Incremental • Criteria for overall situation may be challenges as they present themselves
Problem-Solvingunknown & are not considered • Uses whatever knowledge is required for
• Optimizes locally local problem-solving
Exploratory • Primary goal is to determine what the • Situation may be “perturbed” by changes to
Problem- conditions of the situation are determine the nature of effects
Solving • Secondary goal is to determine if & how • Uses idealistic and systematic knowledge to
the situation warrants changes explore & pragmatic knowledge to act
• Driven by “desire to make life easier” • Mostly performed alone
Innovating • May be highly practical & directly • Relies mostly on idealistic, pragmatic, and
or concerned with aspects of daily work automatic knowledge
Creative • Criteria may be nonconscious • Uses idealistic knowledge to determine
Exploration • Constraints are considered explicitly criteria & pragmatic and automatic
• Sharply focused on desire to improve knowledge to find solutions
• Flexible, no particular solution sought
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Leisurely or Unfocused Exploration -- “Give Some Thought to It”

On Friday morning Mary Merriweather wonders what she should do during the upcoming
weekend. She does not have to make up her mind until later and has many options. There
is a movie she might wish to see, she might drive to see some friends in the country, or she
might want to sleep in on Saturday, not plan anything but just see what comes up. In
many ways she has no strong preferences but would like to have an interesting, yet restful
weekend since her week has been very busy. As Friday progresses and she completes her
work, she revisits her options and gradually settles on sleeping in and catching up on her
reading on Saturday even though it will be a nice and sunny day. Her plan is far from
firm and hence when a friend calls at five PM and suggests that they go bicycling on
Saturday, Mary gladly accepts.
We engage in “leisurely or unfocused” exploration whenever we mull over a situation,
engage in general speculation, or make loose plans for how we might approach a future
situation. In these cases, we may not have a clear idea of what we are trying to achieve, nor
may we have specific goals or criteria by which to judge the desirability of the outcome that
we may achieve using the approach that we generate. We also may disregard many
constraints and uncertainties.
Leisurely or unfocused exploration is one of the most frequent OOT activities we
undertake. Precisely because it is unfocused and leisurely, it is also rather unproductive and
the quality of the conclusions, plans, or approaches we develop with this kind of thinking is
not very high. Whenever we respond to someone that: “I have thought about it,” we typically
have explored the case leisurely and unfocused and may not have arrived at a conclusion at
all, or our conclusion may be too vague or premature to be presentable.
Many philosophers and cognitive scientists maintain that humans use only a fraction of
their mental power. That indeed seems to be the case, and a particular reason seems to be that
we frequently address even important issues and situations leisurely and unfocused. There are
many reasons why we are considerably less than vigilant in our OOT. For example, we may
not have the time or mental peace. The issue may not be perceived as very important or we
may pursue it more for fun than in seriousness. Or we may not know enough about the issue
and its various aspects to address it in a concerted manner. Unfortunately, the latter condition
is often the case. We actually may not be sufficiently aware of the nature or the seriousness
of the situations to recognize that we would benefit from addressing them with a focused and
attentive approach. We may also not be in the habit of addressing challenges with dedication
and focus.

Crisis Problem-Solving -- “Avert Disaster!”

Tom Hagan is faced with a problem. His best customer has just called with an emergency
order for 30 pallets of the special roofing hardware that Tom’s firm manufactures. Tom
finds he has 40 pallets in stock. However, 25 of them have already been sold to another
customer and are in the process of being loaded onto the delivery truck. His firm cannot
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 285

possibly manufacture or buy the additional 15 pallets until two or three days from now.
Tom would like to satisfy both customers if at all possible and definitely does not like to
create any problems with either. He figures he has several options, but needs to contact
both customers immediately to explore if they can be flexible and, particularly, if either
can make do with a partial delivery. Based on that information, he determines his best
options.
We engage in “crisis problem-solving” when we are faced with a problematic situation
that requires that we find a solution -- often to a dilemma, and often quickly. Thus, in such
problem situations, we are often under time pressure, have limited resources, or are
constrained in other ways. In addition, if we do not solve the problem (i.e., come up with a
workable solution) the consequences may be dire. As a result, we may have to make do with
whatever resources we have, including our present knowledge. (We normally may not be
able to bring in additional knowledge or create new knowledge by research. )
Due to the difficult circumstances that often surround critical problem situations, we tend
not to be very creative or vigilant in the way we approach and handle them. We will only try
to find a satisfactory solution to the problem -- one that alleviates the major issues -- instead
of searching for the best solution possible.1 Our focus then will be on identifying or creating
and implementing any acceptable solution, perhaps as quickly as possible, instead of making
the very best out of a difficult situation.

Routine Problem-Solving -- “Perform Competent Knowledge Work!”

Kristi Long manages the short-term cash investments for Sigma. It is about 9 am and she
has just contacted two banks and a broker and has offers to place contracts for one
million dollars with each at good interest rates for one, two, and four weeks, respectively.
She has the new three-month forecasts for cash uses and income in front of her and must
identify which of the three offers are most attractive given the daily projections for cash
in- and out-flows and expectations for variations from forecasts. The situation is quite
familiar. Kristi has performed this task innumerable times before and automatically goes
through the reflections that permit her to arrive at an appropriate choice in a very short
time.
The majority of the knowledge work we perform as proficient professionals involves
routine problem-solving. We are very familiar with the cases we face, hence dealing with
them requires mostly automatic knowledge and case-based reasoning involving well-known
cases. Even when the cases differ from routine, the experienced knowledge-worker falls back
on well-known scripts and general reference cases that guide problem-solving without much
speculation but with extensive use of pragmatic knowledge.
In the organization, its structure, procedures, workflows, and each knowledge-worker’s
responsibility area are traditionally arranged to facilitate routine problem-solving. In these
cases, the functions become highly specialized and it is considered desirable that people
become highly skilled (i.e., have internalized the pragmatic and automatic knowledge needed

1 Herbert Simon (1957) suggested the concept of “satisficing” to denote when a satisfactory,
rather than an optimal, solution is acceptable.
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to perform their tasks, even if by rote). Such arrangements lead to great efficiency in
situations that are repetitive or relatively uniform.
Such extensive specialization poses problems, however. Without broad and vibrant
learning programs and renewal opportunities, the organizations and the people within them
often become inflexible and lose versatility. Individual knowledge tends to become narrow
and specialized (few people maintain general scripts and schema) and there will be difficulties
communicating between departments when nonroutine situations occur. Left to themselves,
organizations can become hierarchical, bloated, and very rigid. As a result they also become
inefficient and deliver outdated products and services.

Systematic Problem-Solving -- “Find Quality Approaches to Special Challenges!”

David James, Paula Hirschbaum, and Harry Peters are appointed to form a taskforce to
propose new procedures for order processing at Delta Inc. They analyze the present
order processing system and make a detailed flowchart of how it works and of the tasks
and activities that are performed by staff and automation. It is the first time Delta has
obtained a comprehensive overview of the procedures involved in this system. The team
members identify features that have led to several problems, ranging from introduction of
errors to delays in both shipping and billing. They start to specify characteristics that
would be desirable in the new system and explore ways in which the desirable attributes
could be obtained by redesign. Over several weeks of dedicated work they arrive at a
proposed conceptual design for a new system. Since the new system may affect operation
in several departments, they review and discuss potential changes with the managers and
other representatives from these organizations. When they have arrived at what they
think is a very good design, they will submit it and two alternatives to their management
for review, modification, and adoption.

Figure 8-2. Good Systematic Problem-Solving Expands Scope Before Narrowing It

down to One Solution.
Scope No Longer Considered
Scope
under
Consideration Tighten Scope by Narrow down
"Generate and Test" to Final Solution
Consider to Create Efficient
All Alternatives
Initial Broaden Scope to Reframe and Perspectives
Familiarization Search for New Perspectives and
and Paradigms Options
Scope No
Scope Longer
Considered
under
Consideration

Evolution of Problem Solution

Solve Problems! Make Decisions! -- Use Knowledge Creatively! 287

Much of the formal outcome-oriented work we perform is systematic problem-solving. At

home we may tackle simple daily problems such as determining what we can make for dinner
with the raw materials that already are in-house. At work, we may struggle with more
complicated problems such as designing new ways of conducting business, exploring which
new products to consider, and resolving conflicts between high-priority projects.
One model of effective systematic problem-solving, presented in Figure 8-2 shows that to
obtain good solutions, after the initial familiarization, one must broaden the scope to explore
and identify new opportunities, perspectives, perhaps learn, and generally bring new
knowledge and points of view into consideration.
After the initial familiarization and formulation, depending on available time and
resources and progress towards reliable insight and potential solutions, it is time to stop
expanding the scope and to start analyzing and considering what we have discovered. This
phase should bring new understanding of what is possible and leads to the “alternatives
generation” part of systematic problem-solving, where potentially efficient alternatives are
progressively refined by “generate and test” approaches until a small set of promising
alternatives remain. The last part of the process is the solution selection where the scope is
narrowed down to the final version of the present alternative, which often may result in a
scope that is different from the original challenge.

Figure 8-3. Illustration of the Generate-and-Test Process.

Projected
Performance

High
Performance Fourth
& Final
Solution
Third
Proposed
Solution
First
Proposed
Solution

Second
Proposed
Test Solution
Present
State of
Affairs Generate
Low Changes
Performance Introduced
Starting Significant
Condition Changes
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The generate and test process consists of repeatedly generating a proposed next step
solution which is defined in sufficient detail for it to be tested for expected performance. This
process is illustrated in Figure 8-3 which indicates a situation that proceeds through four
cycles before a final solution is arrived at. The process concludes (a final solution is
accepted) when either (a) significant further improvements cannot be expected, or (b) when
allocated time or resources are exhausted.
Systematic problem-solving requires the full range of our knowledge. Specifically, we
need to bring to bear our idealistic and systematic knowledge to form our visions and guide
our goal setting and our methodologies for approaching the problems. We also need to rely
on our pragmatic and automatic knowledge to obtain the facts and details for our work. The
greater our relevant knowledge and comprehension is, and the deeper it is, the greater our
value is as knowledge-workers.
The quality of systematic problem-solving is to a large extent a function of our primary
work-related expertise. But it is also highly dependent on the other areas in which we have
good knowledge. The general breadth and depth of our expertise contribute to a greater
ability to address challenges and generate broad, creative, and high-quality approaches to
meet them. For excellent systematic problem-solving -- as for other types of problem-solving
-- world knowledge, knowledge of adjacent work-related domains, and knowledge of daily
life, are all important as indicated in Chapter 4.

Decision-Making -- “Generate, Select, and Implement an Approach to Handle the

Challenge!”
Harry Cozak, a Zumak Corporation customer service engineer, is asked by a large
customer, Boleen Associates, for Zumak to help redesign a major subassembly that is a
big consumer of Zumak parts. The redesign is difficult and could require parts that
Zumak cannot provide at a reasonable price. Since Boleen has limited manufacturing
expertise, the redesign could also lead to specification of parts that in addition to being
difficult to make might not perform well. Boleen has asked Zumak to participate as a
strategic partner to ascertain that the redesign will: (a) benefit from Zumak’s expertise in
making light, durable, and reasonably priced parts; and (b) create parts that Zumak will
be able to manufacture.
Harry has talked to his superiors and has been directed to explore how Zumak can be
most responsive without “giving away the store” and to decide what Zumak will do. The
situation is not simple. Zumak does not have any design and manufacturing experts who
can participate without removing them from other important projects. On the other hand,
if Zumak is successful in assisting Boleen, it may lead to significant and highly profitable
orders over the next few years. If Zumak declines to assist, Boleen may either go to
another supplier or end up with a bad design.
Harry outlines several options for how Zumak can assist Boleen. Some involve Zumak
experts full time during the redesign effort. Others require less involvement. For each
option, he projects the strengths and weaknesses of involvement, immediate costs,
expected quality of design, potentials for benefits, and uncertainties. He also explores
with several department managers the reality of the options and obtains additional ideas.
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 289

The next step is for Harry to weigh the options. He finally decides that the best option is
to borrow one of Zumak’s best design engineers half time over the next month supported
by a manufacturing specialist for one day a week during the same period. He presents his
decision and the associated tradeoffs to the management committee before he
communicates to Boleen how they will assist.
During his deliberations, Harry has identified the specific decision criteria that he needed
to observe.
We talk about “Decision-Making” to denote the complicated process associated with how
we face situations that require management or intervention and find acceptable ways to direct
or influence it. We discuss Decision-Making in greater detail later.

Evolutionary and Incremental Problem-Solving -- “Let Me Tackle That Problem When I

Get to It!”
Susan Hammer is traveling from New York to meet her parents in London. She has the
name of their hotel but has no idea where in London it is located. That does not worry
her, however. She has been overseas many times, is not in a hurry, and has enough
money. Her plane will land at Gatwick where she has never been, but she has heard that
it has train connection to London, which may be less expensive than a taxi.
When Susan arrives at Gatwick, she finds a bank and chooses to get some more local
currency in the event she needs to take a taxi. She then finds an information booth where
she learns that she can take a coach that will bring her closer to the hotel. Another and
less expensive option, they tell her, is to take the train to downtown London and catch the
subway from there.
Since Susan is tired after the overnight flight, she chooses to take advantage of the
simplest approach available which is the combination of the coach and taxi, and proceeds
accordingly.
Quite frequently, we engage in evolutionary or incremental problem-solving. For
example, we postpone -- often very appropriately -- decisions about how to approach the
detailed challenges that we know we will encounter until we actually have them before us and
can examine them. At times, however, we can prepare ourselves with resources and earlier
actions in ways that place us in much better situations to deal with the challenges when they
occur.
A drawback of evolutionary problem-solving occurs when the problem solvers take a
myopic perspective, solving each new task without considering the goals of the overall
challenge. This type of problem-solving is closely related to incremental decision-making as
discussed below.

Exploratory Problem-Solving -- “Find out What Goes on and See If Anything Can -- or
Should -- Be Done About It!”
Peter West is a product manager at Bundin Inc. responsible for fractional horsepower
electric motors. His sense is that the market penetration of his products is less than it
should be, and this is backed up by independent marketing studies. Bundin’s sales force
and distribution system seems to be just as good as its competitors’ and the quality and
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price of its motors are as good, if not better, than competition’s. Peter decides that he
needs to explore if it is possible to improve the market penetration. He does not, however,
have good ideas as to what will be most likely to produce the results he is after.
After discussing his notions with his associates, Peter starts two initiatives, both designed
to enhance customers’ willingness to use Bundin’s motors instead of competitors’. One
initiative is to redesign the marketing literature to include more applications examples of
how to take advantage of special features that Bundin’s motors have. The second is to
provide extended application engineering assistance for no fee to customers who want it.
Both of these initiatives will require some time to show results but are expected to be
worth the effort.
We engage in exploratory problem-solving when we suspect the existence of an
opportunity or a problem without knowing what it is or how to approach it. In these
situations, we often resort to outright experimentation by changing conditions that we
“suspect” will have the desired impact. Clearly, the more we know about the underlying
“system” the better we can identify factors that may influence the outcome in the way we
wish. In short, when we have insufficient knowledge, we often revert to exploratory -- or
evolutionary -- problem-solving.
In exploratory and evolutionary problem-solving it is normally not possible to plan
proactively what the next steps should be. As a result, these types of problem-solving may
lead to “blind alleys” and require non-monotonic reasoning and other kinds of back-tracking.

Innovating or Creative Exploration -- “Make What You Are Doing Better!”

June Hanson builds small subassemblies that are part of large automatic milling
machines. One part that she uses holds several other parts together, fits very snugly into
the “cage,” and is very difficult to install. Minute variations in dimensions that do not
affect operational performance at times make it impossible to install the part the way
prescribed and it has to be scrapped. June thinks that there may be ways around this
problem and starts to experiment with different ways of inserting the parts, she even starts
to fashion small jigs from metal coat hangers. After a while she discovers that she can
use a method to install most of the parts that previously were discarded. In addition, she
finds that with her new method she can build the assemblies quicker as well. As part of
her work, she also has found out which dimension variation causes most problems and
she is able to help define new tolerances for it.
Knowledge-workers at all levels are likely to innovate at any time. We all try to change
the way we work or modify the objects we work with, mostly to make life easier for
ourselves. However, we also innovate to improve our performance within the organization
we work with, particularly when we understand how that can benefit us.
We are in a better position to innovate in ways that serve the organization well when we
are given a broad understanding of our work environment in terms of its nature, how it relates
to upstream and downstream activities, as well as the overall goals of the organization. This
makes it important for any organization interested in grassroots innovation to ensure that its
knowledge-workers are allowed and encouraged to develop broad knowledge and a good
understanding of the corporation’s direction.
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 291

Some Particular Aspects of Problem-Solving and Critical

Thinking
Having considered what can best be thought of as “macroscopic” problem-solving, we
need briefly to visit a number of “micro-issues” that allow us to work very effectively with
challenges in our daily work and life.

Running Decisions Are an Integral Part of Any Problem-Solving Process!

When people or organizations engage in problem-solving, every step of the process is

dependent on decisions. During analysis we subdivide the problem into smaller subproblems.
When we synthesize, we make a number of smaller trial-and-error steps as we explore
potential approaches. All of these subproblems involve characterization or representation of
our notions, and we make running decisions about what to do next, how well the present
notion fits, whether or not to accept or reject it, and so on. Most of these decisions are
implicit and hidden from observation and may be performed automatically.
Consider how you may approach the task of building a travel itinerary to leave Boston for
a one-day meeting in San Francisco followed by an afternoon meeting in Atlanta before
returning to Boston. You probably have preferences for airlines, hotels, and how early you
would like to arrive to get a good night’s sleep. Your approach may be to grab the Airline
Guide, “choose” (i.e., decide on) a direct flight from Boston that arrives in San Francisco
before 10 PM, “choose” to use taxis to save time when leaving, and “choose” the hotel. Since
the meeting is expected to last until 5 PM, you now have to “choose” to fly to Denver,
“choose” to sleep over, and “choose” to take an early morning flight to Atlanta to arrive on
time. To meet this schedule, you have to “choose” to fly on different airlines and may
“choose” to stay at one of you less favorite hotels. In all, you made about a dozen “small,”
hidden, and possibly automatic decisions as part of the problem-solving process.
We do not treat these running, implicit, and hidden decisions as “Decision-Making” in the
sense we discuss below. The product of the problem-solving process -- the final schedule, in
the above example -- becomes an alternative that itself requires explicit Decision-Making to
accept or reject. Choices that involve running decisions are part of all problem-solving and
all knowledge-intensive activities, and we make a myriad of them every day. We only tend
to identify them explicitly when we need to model and codify knowledge for automating
reasoning in knowledge-based systems.

OTHER ASPECTS OF PROBLEM-SOLVING

Two major issues in outcome-oriented activities deal with: (a) how appropriately the
problem or challenge is defined or “represented” to allow effective approaches to be brought
to bear; and (b) having available the pertinent knowledge required to deal with it. It is also
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important to have appropriate information. Specific problem representations often make

possible very effective and stylized solutions, particularly for mathematically or logically
formulated problems, which then can be approached with methods that are known to yield
solutions. The pertinent knowledge covers knowledge both about the underlying mechanisms
and the expected behaviors of the problem from which judgments and values can be derived.
It also covers knowledge of solution methods and techniques.

Representational Issues

We can represent problems or challenges that we face in working life in a host of different
ways. Some are verbal in the form of well-structured stories or formatted descriptions, others
are pictorial, others still are represented by logic statements, mathematical formulations,
algorithms, or even directed graphs. For many of these representation, effective approaches
are available for how to find good or even optimal solutions. For others, such as the traveling
salesman problem, there are no perfect, just “good,” approaches.
The need to find a good representation becomes clear when we consider a chess board and
try to explain the present position of all pieces using a narrative instead of the concise
notation that has been developed over a long time. Similarly, proper representations of
mathematical problems or of the assets and liabilities of a corporation are crucial when we
want to apply particular approaches or evaluate desired outcomes.

Problem-Solving “Mini-Strategies”

Similar to the way we use running decisions in problem-solving, we also use many
standard or specialized strategies to approach smaller problems within larger outcome-
oriented activities. Many of these strategies have been developed by careful study of
problem-solving behavior while others have been created as effective methods to solve
particular types of problems. Strategies have been developed by many disciplines ranging
from mathematics, computer sciences, and management sciences, on one hand, to psychology
and social sciences on the other hand. Many experts have their own strategies, based solely
on their own experiences. Some of these can be rather complex, effective, and ingenious!
Three very different among the more well-known problem-solving approaches, or “mini-
strategies,” include:
• Means-ends analysis: a strategy whereby one compares the given state with the desired
state and, based on the “gap,” decide on a “reasonable” approach. This approach is often
adopted in systematic problem-solving to determine in which direction to proceed and
what to do next.
• Generate-and-test: a procedure that we use whenever we synthesize. Consciously or
nonconsciously, we generate a potential candidate for what we wish to attain and then
proceed to test how well that candidate performs relative to our criteria. When working
actively on a simple problem (such as finding a good route from St. Louis to Omaha) we
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 293

can go through several generate-and-test cycles in one second for candidates that we later
will call “obviously unsuitable.” When the problem is complex -- one that we may be
mulling over for days -- we may take a long time to go through a cycle.
• Mathematical programming: approaches such as linear programming (LP) or mixed
integer programming (MIP) to find the best way of handling complex situations with
thousands of variables like inventory, logistics, and allocation problems.

SCRIPT FOR PERSONAL ON-THE-JOB PROBLEM-SOLVING

Karen Jones is a relatively new operator of the catalytic cracking unit in a large oil
refinery. Over the last four months she has acquired a good deal of knowledge about how
the process normally operates at many different throughputs and with different feeds and
has become a competent performer. She has learned about many different ways in which
the process can malfunction and how to deal with them. In spite of this detailed
knowledge, there still are many aspects of the operation that she has limited
understanding of, has not been exposed to, or does not understand.
Hence, whenever the process changes its operating behavior, Karen observes it closely.
She uses the process control computer to track changes and potentially abnormal
conditions, examines its displays, confers with the outside and upstream operators, and
peruses operating history over the last hours. However, she cannot watch all displays
and instruments or cope with all the information that is available to her. Instead, she
focuses her observations based on her experience, expectations, and perspectives, biased
by her knowledge, however valid or invalid. Thus, Karen “filters” the information that
she is willing -- or able -- to observe.
In one such situation, the cat cracker’s throughflow pulsates every twenty minutes in a
way that Karen has not observed before. She chooses to watch the central heat balance
and flows closely but does not quite understand what is happening. She reasons that it
must be due to the same condition that caused a similar situation a few months ago and
she selects to deal with it in the way that was effective at that time. Thus, she reduces the
feed slightly and expects the condition to improve. Instead, it becomes worse over the
next hour and she contacts her superintendent. He has seen the situation before and tells
her that she must also observe the heat balance of the adjacent coker unit when unstable
situations occur and indicates to her what that means. The new insight can also tell her
how much to reduce the feed to stabilize the unit. Karen realizes that she has learned a
new approach to diagnose the operations.
Problem-solving that reveals previously unknown or misunderstood conditions often leads
to valuable ways to build new knowledge as part of gaining on-the-job experience. In this
type of knowledge building it is necessary to consider what happens when knowledge-
workers perform their functional tasks. A simple script or model to illustrate how this process
may be conducted is shown in Figure 8-4 for an oil refinery operator. This script is one of
several perspectives of how a person operates when solving problems and learning on-the-job.
It includes representations and perspectives on how knowledge-workers may proceed to
perform their duties when they encounter unfamiliar situations.
One significant aspect of KM deals with how one may provide support structures for
knowledge-workers to aid their work or improve their knowledge and understanding to tackle
294 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

new situations or different tasks. This is of major importance for the intelligent-acting
organization that needs to make knowledge-workers or departments more versatile, empower
them to handle nonroutine and unprecedented situations.

Figure 8-4. On-the-Job Problem-Solving and Learning in Oil Refineries.

Operate the
Refinery
Prior perspectives, biases, and both
Refinery Operations &
valid and invalid knowledge
Performance

Observation Filter

Interpret how In-house knowledge

the situation can about possible & desired
be understood operating practices &
resulting performance

Compare what is
understood about the situation
& how that corresponds to what is:
a. previously known & expected; Capture or
b. outside previously known; codify new External knowledge
c. in conflict with previously known. knowledge about possible & desired
refinery operations &
a b c Verify situation performance
conflict
Handle with Obtain new
established knowledge
approaches Obtain new
knowledge

Internalize New Knowledge

Explore and
do research
to create
Establish possible Establish possible
new knowledge
approaches to approaches to
handle situation handle situation

Visions & Ideas for what

can or should be done

Resolve to Act & Select Actions

Plan Actions
Implement Actions

When information about a new situation is presented, a knowledge-worker may proceed

through a series of steps to decide how to handle it. Several aspects must be considered: the
nature of the situation, what is known about similar situations, what is known in general, and
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 295

so on. The model for how this process works can be described as indicated in Figure 8-4 with
the following steps:
1. As information about the situation is presented to a knowledge-worker, the person will
decide which knowledge to use to handle the situation.1 It may be knowledge that has
been internalized, perhaps complemented by external knowledge from coworkers or
outside human sources; or knowledge that is codified in written procedures and other
reference documents or in knowledge-based systems, and so on.
Example: A refinery operator who is presented with information that the process is
slightly upset may choose to handle the situation based on her own experience without
consulting anyone else (i.e., the operator decides that she is sufficiently proficient to
handle the situation and has the knowledge required).
2. Given both the information and knowledge, the person first interprets what is to be
understood by the situation to establish “what the situation is” according to existing
criteria and understanding.
Example: The refinery operator interprets the pressure, temperature, flow, and other
information and looks at the history to determine the patterns of the upset, identify
potential causes, and pinpoint areas of uncertainties and evidence that cannot be
explained with the information at hand or the present understanding (with available
knowledge).
3. Given the interpretation of “what the situation is,” the person then compares the
interpretation (i.e., what is understood about the situation) with what is already known and
expected in order to identify the degree of correspondence. This comparison will result in
several possible outcomes:
a. The situation is of a known type and there is no evidence of uncertainty. Such a
situation can normally be handled with established approaches. The knowledge-
worker can learn by confirming and sharpening what is already known.
b. The interpretation presents a new, previously unknown, type of situation that cannot
be explained with present understanding and knowledge. Therefore, the situation
cannot be handled automatically with established approaches. The knowledge-worker
can learn by adding to what already is known.
c. The situation contradicts what might be expected from what is previously known.
This situation also cannot be handled automatically with established approaches. The
knowledge-worker can learn by revising and replacing old and inappropriate
knowledge.
Example: When comparing the new situation with what is known, the refinery
operator may establish that:
a. The process is upset because of variations in the feed composition. This is a well-
known problem and is handled routinely.
b. The process is upset because of a wrong process stream having been fed to the unit
leading to a totally new and previously unknown type of situation (i.e., the operator
has not seen this kind of situation before). The operator needs to consult with

1Knowledge in this context may consist of facts, known causal chains, concepts and
perspectives, beliefs, judgments, expectations, criteria, and strategies for how to approach and
handle situations that fall within the knowledge domain.
296 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

supervisors and process engineers to figure out how to handle the situation.
c. The process is upset due to a combination of changes in feed flow and process steam
enthalpy that the operator thought would cancel each other and make the process
remain stable. The operator needs to learn about these conditions and revise her
misunderstanding of how the process works under these circumstances and how the
process should be handled when this condition arises.
4. Given the best understanding of the situation, the knowledge worker generates a few
options for how to handle it based on criteria for what is desirable and visions and ideas
for what is possible.
5. Given options for how to handle the situation, estimates of what would be required to
implement the various options, expectation of results from choosing the different options,
and the availability of capabilities and resources to pursue the options, a selection is made
of how to proceed.
6. The selected option is implemented.
This script, is idealistic in many respects. In reality, there are many intervening factors
and constraints tend to make the process less streamlined and clear. For example, the process
is often affected by many affiliative objectives and egocentric concerns as will be discussed
below.

SOME ASPECTS OF CRITICAL THINKING

We need to think critically to perform regular knowledge work. We need to think

critically to be good problem solvers. We need to think critically to be creative. We need to
think critically to make good decisions. We need to think critically to act intelligently.
Whenever we deal with routine situations, and particularly with unusual and complex
challenges, we need to ascertain that what we initially perceive and plan is the best
perspective.
Diane Halpern provides extensive insights into what we mean by “critical thinking” and
K. J. Gilhooly offers complementary and equally insightful perspectives.1 One of the primary
characteristics of critical thinking is to think before acting, that is to assess the situation, plan
what to do and say, and execute the plan decisively and matching it with the situation. It is
also important to be prepared to include flexibility, persistence, and nonmonotonic reasoning
(willingness to self-correct) in critical thinking. Other aspects of critical thinking in this
context deal with maintaining congruency with basic principles through sound reasoning and
constant search for new perspectives, paradigms, and approaches. Proper critical thinking
requires the whole registry of mental approaches discussed in this book.
To think critically requires extensive knowledge, including knowledge about the subject
matter and adjacent areas. Importantly, critical thinking can be learned. It then requires
knowledge of thinking about thinking, much of which is discussed in this book.

1 Halpern (1989), Thought and knowledge: An introduction to critical thinking.

Gilhooly (1988), Thinking: Directed, Undirected, and Creative.
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 297

Outcome-Oriented Work in Organizations

The outcome-oriented work performed in organizations is in principle quite similar to
individual outcome-oriented thinking. One major difference is that we frequently find more
or less well-organized groups involved in the organization’s problem-solving process.
Normally, the organizational structures are specifically tailored to perform outcome-oriented
work as efficiently and competently as possible and as well as management can specify it.
Nevertheless, there will always be tradeoffs between conflicting requirements, available
resources, and existing proficiency.
One major problem with organizational outcome-oriented work is the complexity of
communications both between people and organizational entities. Although networking
between different parties constantly is improved as a result of better computer networks and
telecommunications, many interpersonal communication difficulties still arise. For example,
extra time is consumed, errors and misconceptions are introduced, communicated knowledge
and information are abbreviated and incomplete, and communications are misdirected to
parties who may not possess the most appropriate knowledge or authority.

MODES OF ORGANIZATIONAL OUTCOME-ORIENTED WORK

When we examine how we perform outcome-oriented work within the organization, we

become aware of the many approaches that we employ to achieve different purposes. We
work alone as independent knowledge-workers to perform a myriad of tasks ranging from
physical assembly of products to clerical work to manage the development of our
subordinates to complex evaluation of the effectiveness of the current strategy. We also work
on teams -- in committees, on taskforces, and as collaborating groups -- to pool our insights
and expertise or to obtain consensus.
Most of these modes are well suited to some but not all outcome-oriented thinking
purposes. Depending on the task, they will require different complements of knowledge on
the part of the participants. When we work alone, we should possess all the knowledge
required to perform the knowledge-intensive activities involved in completing our tasks.
When we work as part of a team, on the other hand, we need to have in-depth proficiency
only within the area that we are to contribute in. However, we also need knowledge of what
the others will contribute so we can shape our deliverables to theirs to make a well-rounded
end product.

BOTTOM-UP PROBLEM-SOLVING MAY BE FAR FROM GOOD

In many organizations it is now fashionable to let “solutions” be formulated by people “on

the firing line” and then percolated up to the top for selection, decision, and sponsorship of
implementation, often by lower levels. In these organizations, bottom-up problem-solving is
298 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

often ad-hoc and, at times, undirected.

In bottom-up problem-solving where knowledge-workers have limited idealistic and
systematic knowledge and hence use predominantly pragmatic and automatic knowledge,
solutions consist of unnecessarily disjointed, even arbitrary, directions and criteria that do not
conform to a common schema or the organization’s underlying philosophy. The result is a
solution that may suffer from internal conflicts, unnecessary constraints, and limitations that
cannot be easily be modified. We find examples of this in software systems, architectural
solutions to buildings, city planning and, more importantly, in the design of laws, regulations,
and whole economies. One other area of concern is organizational structures where
individual departments organize themselves as they see their role instead of developing an
integrated well-tailored design.
Within such a design, the problems and challenges that are attacked are often selected
because they have come to the attention of the people on the firing line. Yet, they may not be
the most important challenges the overall organization faces. Hence, more pressing issues
and challenges may be ignored.
Bottom-up problem-solving frequently becomes parochial, reflecting local needs and
perspectives. Often, local, parochial goals for resources and entities also direct the efforts.
Even when the lower levels involved attempt to be exemplary corporate citizens, their ability
to take on the broader organizational perspectives is limited. Except in rare situations, the
criteria they observe, the tradeoffs they engineer between constraints, and the scope of
solutions they permit themselves to consider are unnecessarily narrow. Thus, bottom-up
problem-solving invariably leads to suboptimizing and “local search.” Even worse, since the
scope is often narrow, this mode of problem-solving and decision-making also leads to small
incremental changes -- muddling through behavior and incrementalism.
A major problem with bottom-up decision-making is that it limits use of upper
management’s expertise. These individuals generally will have excellent broad expertise that
complements the detailed knowledge of the people closer to the challenge will have.

IS TOP-DOWN PROBLEM-SOLVING BETTER?

Top-down problem-solving is in many respects the opposite of bottom-up. That is, there
is little or no delegation of authority or creative work by the upper echelon to lower levels.
Top managers usurp problem-solving by taking it upon themselves to address the challenges.
They may (correctly) presume that they have broader perspectives, better understanding of
criteria, and are better suited to pursue the broader scope that important challenges require.
Several senior managers have noted that they feel they have a much better understanding than
their subordinates of which ideal and realistic goals to pursue, the scope of solutions that
might be considered, the appropriate methods for finding the best solution, and even some of
the detailed aspects of the whole problem.
Top-down problem-solving suffers from many drawbacks, however. Senior managers
often overestimate the currency and depth of their detailed knowledge only to arrive at
 Solve Problems! Make Decisions! -- Use Knowledge Creatively! 299

solutions that are highly impractical and may not even address the intended problems. In
addition, by excluding lower echelons from the problem-solving process, they introduce two
significant problems: (a) they often alienate the very people who will be directly involved in
implementing the solutions; and (b) since the solution implementers are not involved in the
detailed problem-solving process, they much too often do not understand, nor are provided
insight into, many of the detailed aspects required to implement the solution; that is, the
problem-transfer process is incomplete. Either problem leads to flawed implementation that
may kill the effectiveness of the solution.

EFFECTIVE PROBLEM-SOLVING COMBINES DIFFERENT LEVELS OF THE

ORGANIZATION AND SEVERAL AREAS OF EXPERTISE

For larger organizational problems the best approach to problem-solving consists of

combining different levels of the organization to bring together all needed perspectives and
areas of expertise. An illustration of combined expertise is shown in Figure 8-5 for a situation
where a corporation investigated if it should consolidate and build new warehouses to
improve its logistics operations. In this example, eleven areas of expertise were considered to
be important. The team consisted of three groups that were to contribute their expertise to the
problem-solving effort. The 11 areas were:
• Corporate Vision and • Competitors’ • Customer & Market • Rail and Truck Vendor
Strategy Strategies & Opportunities Operations
Visions
• Corporate • Logistics • Project Management • Transition
Obligations Operations Management
• Warehouse • Logistics Planning • Corporate Logistics
Operations Economics
The three groups consisted of upper management, distribution management, and
management sciences. The latter group contributed methodological knowledge. The
knowledge contributed by each group is shown in Figure 8-5. As illustrated, they
complement each other to a considerable degree. From the three groups’ knowledge profiles,
it can be seen that upper management brings the broadest body of knowledge. On their own,
however, they do not have the detailed operational knowledge, nor the methodological
knowledge required to develop good alternatives. Top-down problem-solving would lead to
alternatives that are deficient in practical aspects, and due to lack of logistics planning, the
solutions would most likely be far from optimal from economic and operational points of
view.
The distribution manager complements upper management’s expertise in all areas of
operations and understanding market opportunities. By assembling a multi-disciplinary team
that also represents different organizational levels, the knowledge and expertise made
available matches the challenge at hand. As a result, much better approaches are developed,
300 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

often with much less effort. Some aspects associated with collaborative teams are discussed
in the next chapter.

Figure 8-5. Combining Knowledge from Different Organizational Levels Provides the Best
Expertise Profile for Organizational Problem-Solving.
Knowledge Of
Knowledge Of Corporate Strategy Knowledge Of
& Vision
Corporate Competitors'
Obligations M Strategies &
Plans
E
Upper
Management
P
Knowledge Of Knowledge Of
C
Logistics Customer &
Planning A Market
Opportunities
Management B
Sciences

M E P C A B I B A C P E M Knowledge Of
Knowledge Of
Corporate B Rail & Truck
Logistics Vendor
Economics Operations
A
Distribution
C Management
Knowledge Of Knowledge Of
P Warehouse
Transition Operations
Management E

Knowledge Of Knowledge Of
M
Project Logistics
Management Operations

Even this approach is not perfect, however. As an example, in many organizations certain
cultural factors make it difficult to include top managers on the team. That is the case where
the top manager has personal (egocentric) reasons for favoring particular solutions or
approaches and, therefore, can influence the process in ways that are not in the organization’s
(or even the top manager’s) best interest.

DIFFERENT APPROACHES TO OUTCOME-ORIENTED WORK

There are many ways to structure outcome-oriented work in the organization, including
having single individuals working alone, specialized professionals working in groups, and so
on. Some models for outcome-oriented work are presented in Table 8-2. The field of
organizational development has long been concerned with such considerations. It has also
provided insights into the added complexity of appropriate reporting relationships and the
larger aspects of overall organizational structures and models.
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 301

Table 8-2. Some Models for Outcome-Oriented Work in the Organization.

Work Mode Selected Aspects of the Models
• Performs the complete task alone & typically full time -- employed
Single 100%
Knowledge- • May network with others when required for unusual situations, to obtain
worker better information, or to add expertise
• Performs Routine Problem-Solving
• Objectives implicit in work function & explicit in job description
Ad Hoc Team of • Formed by affected or interested parties
Collaborating • Often short-term tasks, ranging from minutes to weeks
Knowledge- • Performs all kinds of problem-solving to match challenge
workers • Objectives are often unclear

Specialized Work • Most group members have similar work-related expertise

Group • Multi-disciplinary groups are traditionally rare
in Organized • Often grouped into “departments” managed by same discipline
Department professional
• Performs Routine Problem-Solving
• Objectives implicit in work function, explicit in job description
• Multi-disciplinary team with professional expertise in all required areas
Taskforce • Team members from different levels and affected areas of organization
& • Individuals may be sequestered to project -- often 100%
Multi-Disciplinary • Often Systematic Problem-Solving -- at times Crisis Problem-Solving
Team • Objectives are often explicit, as are timeframe and available resources
• Often assembled from affected areas rather than needed expertise
Committee • Often low dedication -- becomes a “background task” of lower priority
• Often performs Systematic Problem-Solving or Exploratory Problem-
Solving
• Objectives are often unclear
Generalists • Generalists are responsible for broad spectrum of routine and
Backed up with nonroutine tasks
Specialist Network • Generalists have sufficient knowledge to deal with all routine tasks
• Specialist network supports generalists for difficult tasks
• Routine work objectives are clear -- often general & less specific for
nonroutine

Recent trends in reengineering operations have placed new emphasis on the need to
consider alternative approaches to performing knowledge work. In particular, there is strong
focus on streamlining workflows and analyzing in detail why and how work is performed and
on obtaining better work mode alternatives, including automation.
Of considerable interest in this context is that the past practice of employing several
specialists to perform difficult knowledge work is often replaced with a few knowledgeable
generalists backed up by a small number of experts to deal with difficult situations. Not only
may these new work modes reduce headcounts, more importantly, they tend to speed up work
and improve its quality. Successful implementation, however, requires careful consideration
302 Knowledge Management Foundations:
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of the idealistic, systematic, pragmatic, and automatic knowledge that each member of the
team must have. Thus, it is essential that the generalists be given sufficient knowledge to deal
competently with all routine challenges within their purview and with a well-defined range of
nonroutine challenges in addition. They must also be provided with knowledge of what the
specialists know and which challenges can be better handled with their help.

Knowledge-Intensive Work and

Outcome-Oriented Activities
All knowledge work requires expertise because it is invariably knowledge-intensive, also
when some part of it has become automatic. Knowledge work requires focused thinking and
explicit reasoning, and frequently involves nonroutine situations and conditions. Even highly
automatic clerical work, such as “uncomplicated” correspondence filing, requires extensive
judgment and concept knowledge, although much of it has become so familiar that proficient
office workers have automated it and can perform complicated activities within fractions of
one second. Wrongly, many tend to consider as knowledge-intensive only work that requires
strong focus on specific systematic or pragmatic knowledge. In these cases they expect the
work to require mostly conceptual, Expectational, and methodological knowledge and for it to
be evident that the intellectual tasks require explicit use of such knowledge. In reality,
however, almost all human work is knowledge-intensive and is performed better and more
effectively when good knowledge is applied. For example, even in routine work, good
idealistic and systematic knowledge improves short-term performance, and, more importantly,
allows greater innovation that results in increased effectiveness, both locally at the work site
and more broadly within the organization or in combination with outside parties. People who
guide processes such as dialogs with clients or other time-critical situations need to possess
considerable high-level knowledge to be able to assess where the situation is headed and to
plan next steps proactively.
Even working with automatic knowledge must be considered knowledge-intensive.
Considerable high-quality and very complex knowledge is often internalized into automatic
knowledge, which the knowledge-worker uses to perform tasks that over time have become
routine. Just because such knowledge has become routine we cannot discount its complexity.
Yet, we have often found this to be the case when analyzing which “hidden intellectual tasks”
expert knowledge-workers perform when they complete important tasks with deceptive ease
and speed. Anyone who has observed an expert figure skater can appreciate the complexity
of the detailed knowledge that initially was systematic, then after some practicing became
conscious pragmatic, and after much more practicing became automatic. Similarly,
experienced caseworkers who process complex applications may appear to “only perform
clerical work” since they execute comprehensive activities in a fraction of a second --
activities that may take novices over 30 minutes to finish, and then with a lower quality result!
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 303

Reframe -- Change the Paradigm!

Tammy Cooper is Hydro Corp’s strategy director. She is revising the official planning
description of Hydro’s business to prepare for strategy setting and determination of
corporate priorities. For many years Hydro has manufactured home water purification
systems that it sells through various resellers. Hydro’s management has traditionally
considered the company to be a designer and manufacturer of top-of-the-line water
systems and have focused on improving designs and reducing manufacturing costs.
Lately, however, demand for their systems has declined in spite of significant
improvements and lower prices. Consequently, Hydro’s senior managers are convinced
they are doing something wrong.
Tammy has been with Hydro for several years and is at ease with the traditional view of
its business and strategy. She has recently visited with a number of resellers, customers,
and many noncustomers and has started to have second thoughts about Hydro’s
perception of its business. As she mulls over what Hydro provides to its customers, she
gradually starts realizing that her company really may be in a business that is different
from design and manufacturing. As far as its customers are concerned, it appears that
Hydro provides a health benefit service -- which is made possible and facilitated by its
excellent devices -- and that the value of that service to Hydro’s customers is a function of
many factors. As Tammy starts to think about Hydro’s business from that perspective, she
also begins to realize that its competitors may not only be the other water system
manufacturers, but also the bottled water suppliers and others that previously had not
been considered. She also realizes that Hydro’s marketing literature does not at all
address the factors that are important to customers and that its end-user services neglect
major aspects of the customers’ needs and interests.
Tammy changes the whole frame of reference of Hydro’s business description to reflect
her new view. When she presents her new perspectives to her boss and the other members
of the management team, she receives the response: “Of course, how stupid of us not to
realize that earlier!”
Whenever we meet a new situation, whether it is one we are very familiar with or a new
kind of situation, we may initially represent it from a narrow or inappropriate perspective. In
particular, we tend to accept the initial premises and existing understanding as the frame of
reference, often without question.
In these cases we need to reframe, that is, change the terms of reference and perspective
so we can observe the situation from a better or broader point of view or with different
objectives. When we frame the situation narrowly we tend to neglect broader issues and
interactions with other parts of the world that are of importance. In such instances, reframing,
initially, involves incorporating interactions and issues that were previously left out. Later
reframing steps will lead to considerations of parallels and analogs, at first with relatively
concrete similarities and later with more abstract similarities often based on metaphoric
reasoning. In other instances, the situation may initially be framed to focus on a surface issue
or symptom instead of the root-cause, on a wrong goal, or only on a small part instead of the
complete situation. A more important feature of reframing may be the steps we take to
redefine the situation in terms of the basic characteristics that describe its fundamental
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aspects, much as Tammy did when she reconsidered the basic business of Hydro in the above
example. Along these lines, De Bono1 proposes an interesting and very effective approach to
reframing, “lateral thinking,” which we will examine closer below. As its name suggests, that
approach, however, does not search for the fundamental characteristics.

REFRAMING -- STAND BACK AND TAKE A NEW LOOK

Successful experts apply a different and broader strategy towards problem-solving than
their less successful counterparts. They frequently reframe the problem once, or even several
times, before they are satisfied that they have found good solutions for it. This behavior has
long been observed in masters and grand masters and has also been a feature associated with
wisdom. Successful executives all appear to possess the intuitive ability to view problems in
fresh ways, to identify ineffective operating practices and market relations, and to synthesize -
- or even invent -- new opportunities. The major aspects of reframing as we understand it is
to “stand back” from the problem and observe it from different perspectives.
When experts or masters approach a complex situation that does not precisely fit a known
reference case, they exhibit a willingness to examine it to a larger degree and with a greater
investment of energy than most others. In the expert’s mind, there seem to be several major
purposes for reframing coinciding with the high degree of involvement. These purposes are:
1. The expert wishes to make certain that the situation being approached is the true problem
and that it represents all the aspects that need consideration, in particular, that it is not
merely a symptom of an underlying problem.
2. The expert wants to find a perspective that reveals the true situation and which will allow
it to be handled in the most effective way.
3. The expert wants to ascertain that all aspects of the situation are considered.
4. The expert wishes to generate as good and effective alternatives as possible.
5. At times, the expert wishes to find the easiest and least troublesome way to deal with the
situation, perhaps by “forcing” it to fit a previously known case that the expert can deal
with automatically.
Reframing has been observed as a dominant component of effective outcome-oriented
thinking. For example, experienced mathematicians often reframe problems before attacking
them in detail. Similarly, expert physicists and engineers ascertain by “walking around” that
the challenge they face is indeed the real one before they attempt to generate an approach to
deal with it. Highly successful people with physical, and even mental, disabilities reframe
their own situation before they tackle the challenges they meet to identify how they can
succeed in spite of their debilitating handicaps. Finally, expert managers exhibit similar
behaviors when they make important decisions. That is of major interest for our purpose.2
When we reframe a problem, we go through a number of steps that may vary depending

1 De Bono (1992), Serious Creativity.

2 As described by Janis (1989), Crucial Decisions, pages 89-117.
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 305

on the nature of the situation. In general, however, the steps for the whole process follow the
general model for outcome-oriented thinking listed earlier:
1. Accept that the situation (or challenge) must be addressed
2. Characterize the situation
3. Explore what is already known, and what can be made known
4. Analyze the situation
5. Consider the situation from different perspectives, decide which problem formulation will
lead to the best problem solution
6. Synthesize approaches to deal with the situation
7. Revisit the overall problem situation and decision-making (problem-solving) process
8. Reality-check best approaches
9. Decide on most desirable approach
10. Implement approach
Experts who only are familiar with a particular and narrow problem type tend to proceed
quickly through Steps 1, 2, and 3 and arrive at a perception of what the situation is about.
They may spend a bit of time on Step 4 to ascertain that it is defensible to proceed. They will
then go quickly through the remainder of the steps and implement what they think is correct.
Experts who are broadly familiar with a larger set of problems tend to spend time on all
steps, but again pay particular attention to Step 4 before proceeding to Step 5. These experts
are prepared to accept a broader set of models for the situation and possess a larger repertoire
of potential ways to handle different kinds of situations.
People who are less expert on the other hand, may spend time on Step 2, proceed quickly
through steps 3 and 4 without really considering if the problem is the right one or how it may
be reframed. At Step 5, they spend considerable effort. After having completed Step 6,
Advanced Beginners, Competent Performers, and Proficient Performers also do not spend
much effort on Step 7 and may skip Step 8 altogether.1
There are many ways to reframe. Given the characteristics of a particular situation, we
may start to look for causal relationships and root causes. We may explore if there are
dimensions or factors beyond those presented. Provided with a logistics problem described
by physical materials flows, we may look for financial, market, or even cultural and
organizational factors. We may also look for the gestalt of the situation to determine if it can
be considered from a different paradigm than that which is presented.
In reality, reframing a challenge -- a crisis situation, an operating problem, a decision
opportunity -- often leads both to a paradigm shift and a the new understanding of how to
introduce a radical change that goes far beyond “incremental decision-making” and “business
as usual.” What is more unsettling for many is that it tends to increase the scope of the
challenge to include adjacent operations and potentially may suggest rearranging areas that

1Advanced Beginners, Competent Performers, and Proficient Performers refer to the different
proficiency categories discussed in Table 6-1 and below in Chapter 8.
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previously were stable and well established. Clearly, such upheavals may be desirable at
times but are both highly disruptive and counterproductive if too frequent.

WHAT DO YOU NEED TO KNOW TO REFRAME EFFECTIVELY?

Even though much work has been devoted to the value of reframing and nature of
paradigm shifts, little attention has been paid to what one has to know to be able to reframe
effectively, or consistently see challenges from different perspectives.1 In the spirit of Figure
4-11, where we introduced a hierarchy of six knowledge domains for knowledge-workers, we
observe that to be able to reframe, we need considerable knowledge beyond that required for
the primary work-related domain. Table 8-3 gives the basic nature of some of this
knowledge.
In particular, we find that methodological knowledge in the form of “knowledge about
knowledge” and “thinking about thinking” is important to motivate and guide the search for
new frames of reference, perspectives, or paradigms. Similarly, goal-setting or idealistic
knowledge is very important as is systematic knowledge -- the latter to a smaller extent.
When people are taught “lateral thinking” by Edward De Bono or any other creativity method,
they are taught thinking about thinking using both systematic and pragmatic knowledge and
concepts. For this new knowledge to be really useful, it must be internalized by using over
and over again to the point where it in part becomes automatic.
In order to see situations and challenges in new lights and from different perspectives, it is
equally important to “be knowledgeable” in a less abstract manner, that is, to understand as
much as possible of “what goes on.” That means to have a rich inventory of associations,
schemas, scripts, and facts in addition to other mental constructs. This broad knowledge
needs to cover “world knowledge,” “knowledge of adjacent work-related domains,”
“knowledge of primary work-related domains,” “knowledge of private life and hobbies,”
“basic knowledge,” and other domains as these are encountered.
It is not possible to have in-depth knowledge in all these areas. It is, however, both
possible and valuable to expand the knowledge of people at all levels, particularly with goal-
setting knowledge, to allow them to improve their capability to reframe and be more
intelligent-acting at the same time.

We tend to think of reframing as particularly important in “valuable” problem-solving

situations such as those for setting corporate strategy and other high-level tasks. However,

1 Reframing has been discussed by a number of researchers concerned with creativity and
effective knowledge-intensive work. Some include: Margaret Boden (1990), who discusses
“Creative Connections” in The Creative Mind. Donald Schön (1982) discusses “reflection-
in-action” in The Reflective Practitioner. Glass & Holyoak (1986) discuss “problem
reformulation” in Cognition. Edward De Bono (1992) devotes a chapter to “Information and
Creativity” in Serious Creativity, but emphasizes direct information about the challenge and
similar conditions rather than specifying what a person needs to know to be creative.
 Solve Problems! Make Decisions! -- Use Knowledge Creatively! 307

reframing may be just as important “on the line” and in all other knowledge work. Similarly
to other intelligent-acting behavior, the ability to reframe and thereby improve the approach
and the quality of the myriad of “small” problem-solving situations is important. Well-
performed minor problem-solving cumulates into significant improvements in knowledge-
worker contributions and performance for the organization as a whole. Overall, it can be just
as important to reframe unusual operating problems or customer requests as to reframe the
concepts of which business the corporation is in.

Table 8-3. Potential Knowledge Requirements for Effective Reframing.

Increased Idealistic Systematic Pragmatic Automatic
Abstraction & Knowledge Knowledge Knowledge Knowledge
Sophistication
Knowledge about Needed to Needed to guide Needed to perform Valuable for search
Knowledge & motivate search search process for development & explication of
Thinking about for new paradigms new paradigms process for new new
Thinking paradigms, paradigms,
schemas, & scripts schemas, & scripts
World Needed to Needed to Needed to perform Valuable for search
Knowledge of perceive understand development & explication of
Society, Science, potentials for relevance of process for new new
People, & so on possible potential paradigms, paradigms,
paradigms paradigms schemas, & scripts schemas, & scripts
Knowledge of Needed to Needed to Needed to perform Valuable for search
Adjacent perceive translate possible development and explication of
Work-Related potentials for paradigm into process for new new
Domains possible schema paradigms, paradigms,
paradigms & schemas, and schemas, and
schema scripts scripts
Knowledge of Needed to Needed to Needed to perform Valuable for search
Primary perceive translate possible development & explication of
Work-Related potentials for paradigm into process for new new
Domains paradigms & schema paradigms, paradigms,
schema schemas, & scripts schemas, & scripts
Knowledge of Needed to Needed to Needed to perform Valuable for search
Private Life, perceive translate possible development & explication of
Hobbies, & so on potentials for paradigm into process for new new
paradigms & schema paradigms, paradigms,
schema schemas, & scripts schemas, & scripts
Basic Knowledge May not be May not be May not be May not be
of “Walking,” important important important important
“Talking,” 3 Rs,
Social Skills, Etc.
308 Knowledge Management Foundations:
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The Wonder of Creativity

All of us marvel about creative people. Such people seem to create new insights and
knowledge that break with tradition and prior understandings -- and to do so regularly. They
seem to come up with perspectives and approaches that can cut through complex problems
and be valuable by providing solutions that can be both simple and ingenious at the same
time, reveal opportunities that had not previously been perceived, or result in enjoyable art of
every imaginable kind. Creativity, in other words, is rather unusual and extremely valuable,
and something to be cherished and sought. Indeed, it appears that most people would like to
be creative.
Maybe because of its value and scarcity, creativity has been studied by many and from
different perspectives. Recently, Margaret Boden,1 for example, distinguished between
historic and psychological creativity. According to Boden, historical creativity results in
something that the world has never seen before. Psychological creativity, on the other hand,
results in something that is totally new to the person who created it.
Psychological creativity is often made possible by working with advanced ideas and
concepts that already exist but have limited distribution, or are just emerging. As a result,
people in different places may develop similar creations all at about the same time. Often the
people who make such creations have become very knowledgeable and have worked
repeatedly to create new things. Benjamin Franklin and Thomas Edison are two giants who
immediately come to mind. But there are armies of others who also are, or have been,
repeatedly creative. Many of them have learned to be creative and are not natural geniuses.
For us, the important lesson is that it is possible to learn to be creative.

There Are Distinguishable Creative Phases

The creative process, even though it partly can be observed and explicated, is to a large
extent nonconscious. It builds on our ability to notice, characterize, remember, associate, and
synthesize (particularly in the form of outcome-oriented thinking). We do not know what
takes place within our minds but hypothesize that we suddenly “see” applicable and useful
concepts when we juxtapose unrelated mental constructs in new ways to generate previously
unknown patterns. However, as Margaret Boden points out, such “combination-theories ...
fail to capture the fundamental novelty that is distinctive of creative thought.” There clearly
then must be more to creativity than combining existing mental constructs in new ways.
Some of these additional aspects may include intuition, knowledge, and the approach taken to
explore how to attack the challenge. Yet, these elements may still not explain all of creativity.
Serendipity, randomness, and extensive extrapolation in conjunction with abductive reasoning

1 Boden (1990) The creative mind: Myths & mechanisms. Margaret Boden provides a very
interesting analysis of what creativity is and entails, primarily from a philosophical
perspective. That treatise is perhaps the most substantial available on this subject.
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 309

may be important parts too. Clearly, creativity is a result of new and different ideas -- it may
also involve hard work!
Many researchers have observed distinguishable phases in the creative process. For
example, Poincaré suggested four phases:1
1. Preparation -- is largely conscious during which (unsuccessful and frustrating) attempts
are made to find appropriate approach to the challenge. (This may be considered the
familiarization phase.)
2. Incubation -- is primarily nonconscious, with great variations in duration. There appears
to be two stages to the incubation phase: One with obtaining a new perspective. The
other is closely related and deals with how each new idea may be realized. The process
consists of mulling over the issues in the back of one’s mind while occupied with other
activities. During the incubation period there is a constant search and exploration to
generate and test new ideas for how to view and approach the challenge.
3. Illumination -- results in a “flash of insight” in the form of a substantive idea that can be
pursued consciously.
4. Verification -- explicates, reality tests, modifies, and works with the idea to make it a
realistic and implementable concept through conscious through outcome-oriented
thinking.

REFRAME TO BE CREATIVE!

One aspect of creativity involves seeing situations from new perspectives, with new
paradigms. In many cases where creativity plays a role, the overall situation is viewed from
an angle that had not previously been considered. In areas as different as redefining the
business of a corporation, creating a new technical solution to delivering oil to the cylinder of
an engine, and reeducating workers from a shrinking industry so they can enter into an
emerging industry, creative approaches result from having reframed the original problem and
viewing it from a fundamentally different perspective.
Reframing to be creative may be considered an opportunity to take a comprehensive view
of the challenge and consider the basic principles that drive it. Unfortunately, it is much too
easy to consider only surface characteristics while ignoring the larger situation or to consider
the situation to be a continuation of business as usual that only requires well-known solutions.
Quite often, when a company considers how its operations should be made more effective and
efficient, it narrows the problem down to consider its existing organization, basic plant,
product designs, and so on, to be givens. Only very reluctantly will the company consider
those characteristics to be particular solutions that were designed to solve earlier problems
that may not be relevant in the new setting. For creative approaches to emerge, it is almost a
requirement to break out from the old perspectives and paradigms and to rethink.
Creating new paradigms and new perspectives requires considerable exploration. In order
to explore effectively, a person needs extensive knowledge of the issues, aspects, and general

1 As reported by Boden (1990) Op. Cit.

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characteristics of both the specific challenge and the whole gestalt in which it exists, both in
the form of general world knowledge and specific domain knowledge. In addition,
manipulative or methodological knowledge is required to carry out the exploration. On the
abstract level we need knowledge about knowledge. As an example of concrete knowledge
needs, Howard Gardner relates how a young child needs basic manipulative skills when
exploring how a door works to create a basic understanding in the form of scripts and
schemas.1 Similarly, we need a range of knowledge and skills to be able to explore
effectively.
Half of the battle to be creative is won when a new paradigm of the situations is obtained
to build the associated perspectives on basic principles. That, however, is not easily achieved
and typically requires considerable reflection or “mulling over” in the back of one’s mind. It
clearly requires the nonconscious and intuitive activity that is part of the incubation phase.

COMBINE KNOWN ENTITIES IN NEW WAYS!

The second half of the battle to be creative consists of devising new ways to deal with the
challenge once the new paradigm in the form of appropriate perspectives and visions has been
generated. Potential approaches are explored -- to invent whatever it takes to make it happen.
This is the part of the process that requires innovative combinations of existing approaches,
potentially with extrapolation of what is already known to create something that often is
totally new and novel.
We consider it “creative” when someone finds a novel and powerful solution to an already
defined problem without changing its perspective and paradigm. While that may be
appropriate, it often is only half the story. “Real creativity” may take place when there first is
a breakthrough in perception of what the challenge is all about and how it may be represented
and, second, when an approach is devised to realize a powerful way of handling it.
As was implied when we presented the incubation phase, in our thoughts we may iterate
between searching for new perspectives and ideas and generating and testing approaches to
realizing them. The incubation phase may consist of a single iteration when a brilliant idea is
created “on the fly,” or it may consist of numerous iterations as when a person mulls over the
challenge for weeks.
A person may go through all four phases once or may iterate through the phases time after
time as Edison did when he created or invented the incandescent lamp. In the latter case, a
person will switch between conscious (and often physically laborious) activities and hidden
nonconscious knowledge-intensive activities.

1 Gardner (1989), To Open Minds, pp. 280-284.

Solve Problems! Make Decisions! -- Use Knowledge Creatively! 311

KNOWLEDGE BEGETS IDEAS AND IDEAS BEGET CREATIVITY!

That knowledge is an important underpinning of creativity has long been recognized. As

Margaret Boden states: “What makes the difference between an outstandingly creative person
and a less creative one is not any special power, but greater knowledge (in the form of
practiced expertise) and the motivation to acquire and use it.”1
Generating ideas is not easy and automatic. Many individuals are given what some call
“ideaphoria,” a tendency to generate abundant ideas. Others must give themselves
“permission” to explore and experiment with different approaches, to develop new ideas, and
to view situations from different angles. They may initially consider it threatening or
inappropriate to depart from well-known and accepted practices. While part of these concerns
may be rooted in an adverse corporate culture, they are mostly due to limited and narrow
knowledge.
Creativity is not an innate capability. People can be taught to be creative! It is not
something that only a few have and that the rest of us can never attain. We can learn to be
creative. We can give ourselves permission to experiment with new ideas. And, we can
gather knowledge that allows us to generate ideas that are innovative, even creative, and that
make sense.
Many new perspectives and creative ideas result from associations that are formed during
the incubation phase while drawing on prior associations. It is clear that a richer associative
knowledge base will generate many more associations. What initially may not be as clear is
that rich idealistic and, to some extent systematic, knowledge leads to creative ideas that tend
to be more valuable and further from well-known and accepted practices. We may speculate
that the most useful idea-generating knowledge is the general and abstract understanding of
schemas that allows metaphoric and qualitative reasoning and pattern recognition. But the
more concrete scripts and instances for world knowledge, daily knowledge, and knowledge of
primary and adjacent work-related areas are also thought to be very important. In addition, it
is valuable to have specific knowledge of organizational principles such as of categorization
schemes from many fields.
As in any endeavor, knowledge of the process one is engaged in aids the performance
significantly. Understanding the creative process allows us to formulate specific points that
allow us to move the process along. Some of these points can be expressed in the form of
declarations, others can be formulated as questions as in the three examples:
• Any situation that leads to an opportunity to be creative is a challenge for change. It will
lead to a new situation!
• What will be the purpose of the new situation?
• From which different perspectives can we view the new situation? Which paradigms can
we create to characterize the new situation?

1 Boden (1990), Op. Cit. p. 24.

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What Is Decision-Making?
We call it “decision-making” when we face a challenge -- a situation that requires
influencing, direction, or management -- and we have to develop or select an acceptable way
to guide or handle it.1 Decision-making includes the whole process of problem-solving that
precedes the act of choosing a particular alternative. It also includes implementation of the
decision -- to make it happen. Decisions involve prediction of potential future conditions and
the evaluation of related outcomes. They are “outcome-oriented.”
Some theoretical research on decision-making considers it to only involve the selection of
the best among a set of known alternatives. This view is much too limiting given the real-life
behavior of good decision makers and their active participation in shaping the direction of the
decision through exploration and reframing of the overall situation. They also frequently
intervene in the complex social process that surround important decisions to change
objectives and approaches.
Decision-making produces a change in the situation (unless it is a deliberate decision to
maintain status quo). We make decisions all the time to change things. Some decisions are
big and important and have significant implications. Most are small and insignificant and
have little impact; in fact, we may not even be aware that we are making them. Others are
quite conscious, covering a wide range of both complexity and importance.
The final and -- we can argue -- only valuable use of knowledge occurs when we make
and implement decisions. Learning, pooling of knowledge, even the analysis and synthesis
stages of problem-solving have little value unless their results are used as a basis for a
decision that is implemented -- when we use knowledge to make changes that have value.
All decisions require information about the challenge we face and knowledge about how
to interpret and handle it. The better the knowledge and information, the better the decision
will potentially be. However, the quality of the decision also depends upon the approach
taken, the effort invested in making and implementing it, and the factors we consider -- be
they objectively relevant to the challenge, resource constraining, affiliative, or self-serving.2
Even the best knowledge and the best information can produce low-quality decisions if the
approach or style is inappropriate.
When asked, most decision makers -- managers and knowledge-workers alike, freely
admit that they prefer to make decisions as effortlessly as possible by simplifying the problem
to the point where a quick and acceptable decision can be made instead of engaging in in-
depth problem-solving. If they cannot make an effortless decision, they may prefer to

1 In the United States we use the active concept of “making decisions.” In other countries and
languages we find the more passive concept of “taking decisions.”
2 Some implications of factors such as cognitive, affiliative, and egocentric are discussed at

the end of this chapter.

Solve Problems! Make Decisions! -- Use Knowledge Creatively! 313

procrastinate if given the slightest chance! They do so even in important situations without
regard for how much better a well-conceived, deliberated, or vigilantly researched decision
would be. As a result, researchers have concluded that many (if not most) important decisions
are made after insufficient preparation and deliberation. Having stated that, however, we
should also point out that some decisions are “researched to death” with investments much
beyond their value. We even will find situations of “analysis paralysis” and other symptoms
of indecisiveness and ”CYA” bureaucracy.
In general, however, as knowledge about how to handle situations increases, the quality of
decisions improves. Similarly, it improves with increasing information as that becomes
available.

The Decision-Making Process

The general decision-making process is a special case of the general schema for outcome-
oriented thinking. A simplified outline of the decision-making process can be expressed in
the following four stages:
1. DIAGNOSTIC Stage
• Take responsibility for making decision
• Obtain information about the situation
• Identify criteria and goals for desired outcomes
• Interpret and analyze the situation to establish its characteristics, status or condition,
merits, drawbacks, and risks
2. SYNTHESIZING Stage
• Generate and create alternatives
• Obtain external review and ideas, listen to others
• Evaluate and rank alternatives
3. DECISION Stage
• Choose best alternative
4. IMPLEMENTATION and CLOSURE Stage
• Document, plan, program, and allocate resources
• Communicate
• Direct and motivate
• Monitor, control, and re-plan
A different perspective on decision-making was presented by Janis and Mann who
suggested that the normal approach is more cautious and less decisive.1 Instead, they
proposed five stages. (It is interesting to note that from their perspective normal decision-

1Janis & Mann (1977), Decision Making: A psychological analysis of conflict, choice, and
commitment.
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making may be skewed towards avoiding making a decision altogether.) Their five stages
are:
1. Appraise the Challenge
Are the risks serious if I don't change? -- Do I have to make a decision, and if I need to
make it, do I have to make it right away?
2. Survey Alternatives
Is this alternative an acceptable means of dealing with the challenge? Have I sufficiently
surveyed the alternatives?
3. Weigh Alternatives
Which alternative is best? Could the best alternative meet the requirements?
4. Deliberate About Commitment
Shall I implement the best alternative and allow others to know?
5. Adhere Despite Negative Feedback
Are the risks serious if I don't change? Are the risks serious if I do change?
In addition to being more cautious and passive, according to Janis and Mann, the normal
approach as illustrated in these stages involves choice selection rather than creative decision-
making as we discuss these concepts below.

WHAT IS A QUALITY DECISION?

We have many different perspectives of what a “quality decision” is. It may be a decision
that after considerable research best meets the criteria and objectives. For some, it is a
decision that is without discernible errors or that gains consensus from a broad constituency.
For others, it is a decision that is timely, to the point, and provides a usable resolution without
delay. For still others, it may be a decision that is creative, considers and balances broad,
conflicting objectives and a wide set of alternatives, provides new directions, or makes short-
term actions that are effective steps to implementing the organization’s long-range goals.
Clearly, the quality of a decision depends in part on the purpose for which it is made and
where in the organization it is made. For example, minute decisions made by knowledge-
workers as part of their daily work may be more valuable to the organization if they are made
quickly and without errors even though their “quality” in terms of creativity and ingenuity is
limited. On the other hand, if a large number of small decisions are made with ingenuity and
creativity and fulfill other criteria, their cumulated worth is very valuable to the organization.
Similarly, major policy decisions made by the CEO with long-ranging impact may have
much greater value if they are deliberated, vigilant, creative, and based on a broad set of
considerations. Between these extremes there are numerous other situations that require
different decision styles and approaches and where it is pertinent to make tradeoffs between
effort, timeliness of conclusion, and optimality of the chosen or created alternative.
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 315

What Makes a Good Decision?

Research on decision-making shows that it is frequently inappropriate to attempt to make

the “optimal decision” to maximize all the criteria that are directly situation-related. In
general, the resources that would be required to make a thoroughly researched and
comprehensive decision by far outweigh the added value of the investment. Most of the time,
it is both sufficient and desirable to make a “good” decision that conserves time and
investment. As a result, decision makers resort to simplifying approaches, most of which are
appropriate under special circumstances but lead to low-quality, even wrong, decisions when
used inappropriately.
Decision quality may be determined based on several aspects. One aspect deals with
satisfying those criteria that are directly relevant to the immediate challenge. A second aspect
deals with satisfying also those criteria that pertain to the larger situation of which the
challenge is a part. A third aspect concerns the need to consider the influence of resource
constraining, affiliative, or self-serving factors.
Another very important aspect of decision quality is the degree to which the decision
reflects basic principles that underlie or apply to the situation. This is particularly the case in
organizations where many, if not most, big and small decisions directly affect, or are made to
carry out, corporate strategy and direction. If the decisions are made without regard for the
underlying principles or the corporate intents, those intents are either not served or, as is often
the case, are counteracted by the decisions. Most simplifying decision-making styles,
including automatic decision-making, are in danger of making such mistakes. In this regard,
incremental decision-making is particularly problematic -- unless it explicitly observes the
broader criteria -- since it avoids a comprehensive review of criteria and alternatives.
Finally, decisions that are made with proper consideration for root causes are much more
valuable than decisions that only address surface symptoms. Consider a situation that all of
us may have witnessed. A large customer phones up the VP of sales to vent his frustrations
and complains that recent shipments were late and also had quality problems. The VP decides
to give a price break on those shipments to make the customer happy, but does not address or
follow up on the problems of delays and quality. The quality of the VP’s decision is marginal
at best! It is, however, typical of many low-quality, or even counterproductive, “band-aid”
decisions that react to the immediate problem without exploring the need for more
comprehensive actions.

Decision-Making with Multiple Objectives

From a decision-theoretic perspective, a quality decision is one that maximizes the

“utility” of the objective set that governs the decision.1 These considerations fall under

1A classic and thorough treatment of this topic is provided by Keeney and Raiffa (1976) in
Decisions with multiple objectives: Preferences and value tradeoffs.
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“multi-attribute utility theory,” which attempts to provide a rational and tractable approach to
dealing with uncertainty and multiple objectives that conflict, require tradeoffs, and may lack
crisp constraints.
In everyday life the formal use of multi-attribute utility theory is often excessively
laborious and complicated. Once the utility functions are established, to characterize risk
postures, tradeoffs between conflicting goals, and so on, application of the theory is quick and
relatively straightforward. Establishing the utility functions, however, is both complex and
time consuming and may only be warranted in very crucial decision situations. For example,
it may be highly pertinent to use this approach in important public decisions such as siting of
large public facilities and similar projects where the impacts of different alternatives need to
be assessed with some precision.1 Certain personal decisions may also warrant this approach,
like decisions about long-term financial plans for securing the best and most suitable
retirement conditions.

Figure 8-6. A Risk-Averse Individual’s Utility Function for Tradeoffs Between Risk and
Expected Return.
Utility
1.0

0.5

Negligible Low Some High

Risk
0.0 Risk Risk Risk Risk
High
Return
Good
Return
Some
Return
Low
Return
Diminishing
Return

Figure 8-6 illustrates an example of a utility function for tradeoffs between risk and
expected returns for a risk-averse individual. We show how the utility will be 1.0 (“the best”)

1 Keeney (1980) provides a powerful approach to societal decisions using siting of public
facilities as an example.
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 317

for expectations of high returns with negligible risks, clearly the ideal and not readily
attainable condition. As risks increase and/or expected returns diminish, utility becomes
increasingly smaller until it is 0.0 for a situation with high risks and low returns.
One characteristic of utility theory is that it primarily assists the process of evaluating
given alternatives. In cases where alternatives are developed by a human (“manual”) process,
the objectives can only implicitly guide the shaping of the alternatives.
The exceptions to this are the cases where we generate alternatives -- and ultimately the
approach -- to be pursued by mathematical algorithms such as linear or other mathematical
programs or by other forms of algorithmically based optimizing techniques. In these
instances, the multi-objective functions are included directly into the combined alternatives-
generating evaluating process to produce an optimal approach to the situation at hand. Many
decision situations can be formalized and addressed in this manner, ranging from deciding the
optimal operating condition for chemical plants and oil refineries, optimal decisions for
logistic, inventory, and manufacturing operations, even to decisions on seeding, fertilizing,
and pest controls for farms. When we use algorithmic methods to determine the best
decisions, the background knowledge, facts, and even judgments relating to the situation, are
embedded in the coefficients and structure of the mathematical formulation of the “problem.”
Another characteristic of a quality decision is that it minimizes post-decisional regret, it
reduces the pain of “Monday-morning quarterbacking.” A decision theoretician will point out
that from a theoretical perspective, most of these criteria will provide identical results.
Minimizing post-decisional regret and maximizing utility should be identical if the à priori
utility functions are assessed correctly. That assumption, however, is far from trivial and may
not be achievable in practice as Kahneman, Slovic, and Tversky point out.1

CHOICE SELECTION AND CREATIVE DECISION-MAKING

We distinguish between two basic classes of decision-making: (a) choice-selection

pertains to those situations where the decision maker has to decide by selecting which one of
several pre-established alternatives to pursue; and (b) creative decision-making pertains to
those situations where the decision maker participates directly and materially in creating the
alternatives through active problem-solving. As indicated above, some decision analysts
consider decision-making to be limited to selecting among known, predetermined alternatives.
Based upon real-life practices of excellent decision makers, we consider this to be an
inappropriate limitation.

Choice-Selection Decision-Making by “Passive Decision Makers”

All too often, decision-making is narrowed down to this class where the alternatives are
given as fixed and the decision maker’s role becomes one of noncreative administration of

1 Kahneman, Slovic, & Tversky (1982) Judgment under uncertainty: Heuristics and biases.
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criteria for goals and objectives and reduction of risks. Managers engage in choice-selection
decision-making when they delegate “problem-solving” to subordinates or a taskforce, or
request as standard procedure that they be presented with predeveloped alternatives to chose
from. It may be totally appropriate for decision makers to engage in choice-selection
decision-making when they have limited expertise in the given area or when the importance
of the decisions is slight and does not warrant the decision maker’s full involvement.
There are many other valid reasons for delegating the problem-solving aspect of decision-
making. For example, the decision maker may wish to groom subordinates but policy may
require that the final decision lies with the decision maker. In other instances, the decision
maker may wish the subordinates to “own” the alternatives and be integral to implementation
and, therefore, encourage them to develop the approach.
One important form of choice-selection decision-making occurs when we vote for
candidates in a public election. In these cases, problem-solving is performed by specially
interested members of the public. That phase is completed and closed when the candidates
are selected for placement of the ballot.
Unfortunately, many managers reserve the right to “make the final decision” for various
inappropriate reasons. For example, they may wish to hold on to their prestige, they may not
wish -- or know how -- to delegate, they may not have provided clear criteria for what to base
the decision on, or they may doubt their subordinates’ capabilities.
When decision makers with extensive domain knowledge or information chooses to
abstain from problem-solving, they deprive the outcome of important inputs and, in effect,
reduce the quality of the decision. Other problems may enter as well. For example,
frequently, the decision maker is not satisfied with the present alternatives and asks for further
problem-solving and, in effect, delays the decision, which may result in increased costs, lost
revenues, or other problems.

Creative Decision-Making

We consider it “creative decision-making” when the decision maker is actively involved

in the problem-solving process, works alone, participates with others, or generates decision
alternatives for consideration by a group. Whenever a person works alone, s/he performs
creative decision-making.
Creative decision-making has many advantages. In particular, when alternatives are
examined closer while being considered for adoption, they may be found to have room for
improvement. An iterative process then often follows whereby initial alternatives are refined,
particularly after being subjected to reality tests and other evaluations -- and new ideas
emerge and new perspectives are introduced. If deemed desirable, this process may proceed
through several cycles until a desirable outcome has been identified and, therefore, may take
place quickly and efficiently.
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 319

Types of Decision Challenges

IMPORTANCE AND COMPLEXITY OF DECISION CHALLENGES

The importance and complexity of decision challenges vary enormously. Some

challenges are very important but relatively simple to make, such as deciding on the need and
approach to shut down a process plant in a major chemical plant for emergency repair after
equipment failure. It is very important that such a decision is made, and often it needs to be
made quickly. Other challenges may be much less important but very complex. Examples of
selected challenges are illustrated in Figure 8-7.
These examples point to several issues involving decision-making. If done in-depth,
career planning for a new entrant is exceedingly complex when taking into account the
organization’s and the person’s goals, the strengths, and weaknesses of the person,
opportunities for professional and personal development, and so on. Nevertheless, the
decision is relatively insignificant when considering the overall organization. As a result, it
cannot demand extensive investment of resources. What also makes this decision less
important is that it can be changed as time goes by, it is not irrevocable. Decisions to change
a milling machine tool, however, are usually irrevocable.
The reality of the conditions of the decision challenge to a large extent determines the
selection of the decision-making approach. Perceived conditions also play an important role
(these may be grossly distorted in cases where there are misconceptions). In addition, hidden,
extraneous objectives also play a large role. Before exploring the complexity of how such
factors can affect decisions, we will illustrate some typical examples of decision challenges in
Table 8-4.
It is almost obvious that when decision makers have a high level of proficiency, they are
able to make even complex decisions quickly and with good quality. Thus, we can find many
examples of people with high expertise who are making complex decisions with ease for
challenges that may be of great importance to the organization. In those cases, it is clear that
the expertise is very valuable.
We can also find situations where each individual challenge is of much lower importance,
but where the aggregate of many decisions becomes very important. One such case is the
earlier example of planning the career track for new entries. If this function is performed with
low quality, the organization will suffer, at times fatally, in the long run. When this function
is performed with great expertise, on the other hand, it can lead to a very strong and stable
workforce with high expertise and dedication that is almost certain to be successful. In fact,
most “insignificant” decisions in aggregate become very important.
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Figure 8-7. Importance and Complexity of a Few Decision Challenges.

Decision
Challenge
Complexity
Very
Complex Establish JV
with a
Competitor
Plan Career
Path for New
Entry Determine and
Select New MIS
Architecture

Decide to Shut
Decide to down Plant after
Change Tool on Equipment Failure
- Importance -
Milling Machine
Value of Good
Simple Decision
Relatively Very
Insignificant Important
to Organization to Organization
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 321

Table 8-4. Examples of Decision Challenges.

Minor Decisions
• Decide to change tools on a milling machine
• Decide to handle an application form with errors oneself and not call supervisor
• Advice a customer to invest in a mutual fund instead of stocks
• Determine in which file to place a letter just received
• Initiate reordering of consumables for a storeroom
Intermediate Decisions
• Swap the scheduled shifts for two hourly workers
• Adopt an annual production plan for a specialty chemical plant
• Adopt the marketing plan for a new financial-planning service for consumers
• Select investment instruments for a retirement portfolio
• Choose configuration and supplier for personal computers as a company standard
• Respond to a competitive sales situation with a proposal
• Decide to shut down a process plant for emergency repairs after equipment failure
• Decide to develop a new product
Major Decisions
• Hire a new chief executive
• Decide to create a separate subsidiary to market a separate product line
• Build a new manufacturing plant in a new market territory
• Decide to reengineer the operations of the whole company
• Establish a joint venture with a competitor in a new market
• Establish strategic partnering with major suppliers
Policy Decisions
• Develop and implement new pricing structures to meet competitive pressures
• Create and adopt the annual operating plan and budget for a $50 million business unit
• Change the training and educational strategy and program for the whole corporation
• Develop and select a new MIS architecture

MINOR, MAJOR, AND POLICY DECISIONS

Minor Decisions

Much of the time and effort of decision makers at all levels is devoted to making minor,
everyday decisions. For example, executives and most other knowledge-workers spend
inordinate amounts of time on putting out fires, routine chores, keeping their offices running,
meeting deadlines for bureaucratic requirements of limited value, and similar “administrative”
tasks. To perform these tasks, they simplify the decision task as much as possible and if they
have prior knowledge of the situation often resort to automatic, routine decision-making.
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Minor decisions are typically invisible on an organizational level. They may even be
completely hidden or be known only to the decision maker and the people directly involved,
making it very difficult to assess their quality. Small decisions may only be visible through
activities such as knowledge analysis or knowledge elicitation for developing knowledge-
based systems, and in those situations one may only discover decisions that are made with
some regularity.
Small decisions are often made based on pragmatic and automatic knowledge. Little
attention is paid to decision-making methodology or systematic knowledge although, at times,
idealistic knowledge drives the decision nonconsciously.

In the Aggregate, Minor Decisions Tend to Have Major Impacts!

One very important aspect of “minor decision-making” is the cumulative effect that many
of these decision have over time. Narrow, suboptimizing decisions that may cater only to the
situation at hand and, in addition, perhaps to (small) self-serving motives can become highly
detrimental to the organization. For example, following corporate culture and to increase his
own group, an engineering manager may consistently decide to staff projects with his own
people without involving better qualified people from other departments. Such decisions lead
to lower-quality project performance and will in the aggregate have adverse effects on the
organization as a whole -- often without anyone understanding what the reasons are.
Similarly, small decisions of almost any kind have a tendency to build up to significant
impacts. And the challenge is to make the impacts positive!
Well-made small decisions have high positive impacts over time. For example, small
decisions on quality, handling customers, personnel matters, and almost any other matter can
generate considerable advantages for the organization. In order to generate positive impacts
from such decisions, the decision maker needs to have good knowledge of the criteria that
pertain to the larger situation of which the immediate challenge is a part. Knowledge must be
well internalized to provide thorough understanding and the capability to act accordingly in
demanding situations. Decision makers must understand corporate policy, management
initiatives and tactical directions that the policies result in as applied to their operation, and
the implications of their decisions on the larger aspects.1 They will hold this knowledge in
part as idealistic knowledge, but for the knowledge to be readily available for small decisions
it must also be held as systematic and pragmatic knowledge as shown above.

1 A study by Booz, Allen & Hamilton Inc. suggested that corporate objectives and direction
are poorly understood by lower echelons in the average organization. Only two-thirds of a
superior’s understanding is transmitted to direct reports. If this finding is correct, it means
that the second level of the organization (VP) understands 67%, third level (Director)
understands 45%, fourth level (Manager) understands 30%, fifth level (Supervisor) 20%, and
so on.
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 323

Intermediate Decisions

Decision sizes stretch along a continuum from small to major, with intermediate decisions
between the extremes. Intermediate decisions often are considered to be operational and
normally require some deliberation and effort, but they are not considered to have major
impacts on the organization. However, in the same manner as minor decisions aggregate to
become important, the effects of quality of intermediate decisions cumulates over time to
affect the overall performance of the organization.
Intermediate decisions are typically visible on the organizational level and are often
subject to scrutiny as part of performance evaluations of both projects and personnel. Most
deliberate decision-making in an organization is associated with intermediate decisions, and it
is perhaps in this area that good “professional” knowledge is valued the most. That, however,
may be more due to the visibility and interpersonal nature of these decisions than the real
value of professional proficiency, which may provide greater value-added as inputs to small
decisions and regular knowledge work.

Major Decisions

Decision makers at virtually any level, but particularly at executive levels, have
opportunities to make decisions that will influence the organization in fundamental ways.
These decisions create new situations that change operations and conditions and may also
have direct consequences for the organization in other ways.
Although major decisions normally receive considerable attention, there may be less
emphasis on appropriate decision methodology for major decisions than for intermediate
decisions. When major decisions need to be made, the pressure of the challenge is typically
so great that it forces the decision makers to revert back to the decision-making style they are
most comfortable with regardless of whether it is appropriate or not. Subsets of the challenge,
such as economic analyses, will be performed by applying appropriate methods, but the
choice of the overall decision methodology may be arbitrary.1
In order to make high-quality major decisions, decision makers must possess well
internalized -- preferably automatic -- decision methodological knowledge to be able to
choose the best decision approach that will best fit the situation. They must also possess -- or
have access to -- excellent primary-area knowledge on all four conceptual knowledge levels to
ensure that the decision is creative and properly evaluated.

Policy Decisions

Policy decisions are also major decisions, but differ from other types of decisions by being
recognized as having broad and lasting implications. They are recognized as affecting the

1 In Crucial Decisions, Janis (1989) discusses a number of well-known instances where less-
than-desirable decision-making methodologies were chosen for very important situations.
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organization “systemically” and are designed to change the decision-making criteria for many
small and intermediate decisions. Good policy decisions are developed by taking basic
principles into account and supporting the organization’s objectives in fundamental ways.

PROGRAMMED AND NONPROGRAMMED DECISIONS

Herbert Simon provided the concepts of “programed” and “non-programed” decisions.1
He suggested that they were the extremes on a continuum and similar to “well-structured” and
“ill-structured” decisions.

Programmed Decisions

Programmed decisions are situations that can be characterized as routine and repetitive.
Organizations normally will develop specific procedures to handle such situations. Pure
programmed decisions are not considered to require creative problem-solving, but rely on the
procedures to identify precisely which information to take into account and to specify the
steps for how they should be handled. An extreme of programmed decisions are the so-called
“no-brainers” where alternatives and choices are quite clear and do not require thought for
interpretation or judgment. Indeed, in many organizations, such as some financial
institutions, these decisions are automated since they are not considered to require human
intervention. Areas where programmable decisions can be found include:
• Clerical routines
• Standard operating procedures with:
-- Common expectations
-- Systems of subgoals
-- Well-defined information channels
• Management science approaches
-- Mathematical analysis
-- Models
-- Computer simulation
-- Expert systems
• Computer-based management information systems
The decisions that can be considered to be programmable are increasing in complexity as
a result of increased sophistication in automated reasoning and decision-making. In the
1960s, automatable programmable decisions were limited to situations that could be defined
using simple mathematical or logical statements. But now, very complex reasoning can be
automated using factual, conceptual, and experiential knowledge and decisions can be reached
without human intervention. Such sophistication, however, is still more common in military
applications and some process industries than in commerce and general industry.

1 Simon (1977) The new science of management decision Revised edition, pp. 45-49.
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 325

Nonprogrammed Decisions

Nonprogrammed decisions are one-shot, ill-structured, often totally new challenges that
require handling by systematic problem-solving processes. Extreme nonprogrammed
decisions include significant crises, or major or policy decisions that require generation of
creative alternatives to reach the best outcome. Simon uses as an example of a
nonprogrammable decision challenge a company’s decision to establish an operation in a
country where it has not operated previously. Examples of issues that arise in
nonprogrammed decisions are:
• Judgment, intuition, and creativity
• Rules of thumb
• Heuristic problem-solving techniques
Complex nonprogrammable decisions are frequent and often are the most important single
decisions to be made in an organization. Nevertheless, the types of nonprogrammed decisions
that are found span a wide range:
• Choosing how to dress for a party
• Deciding for the first time which car to buy
• Selecting training for executives
• Deciding on corporate strategy

Decision-Making -- Strategies and Styles

TEN DECISION-MAKING STYLES

What constitutes quality decisions can vary extensively in the degree of required
comprehensiveness and timeliness. Consequently, we find it convenient to distinguish
between decision styles that require quite different approaches and produce different results.
Relevant decision styles include:
• Automatic or Intuitive Decisions -- Decisions by Rote
• Snap or “Seat-of-the-Pants” Decisions
• Fixed-Idea Decisions
• Arbitrary-Alternatives Decisions
• Dominant-Factor Decisions
• Dominant-Hypothesis Decisions
• Incremental “Muddling-Through” Decisions
• Mixed-Scanning Decisions
• Satisficing Decisions
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• Vigilant Decisions
Some of these styles relate closely to corresponding reasoning paradigms discussed in the
previous chapter. Others relate more to some of the problem-solving approaches that we
discussed earlier in this chapter.
Except for vigilant decision-making -- all these decision-making styles are based on
strategies that to a greater or less extent are designed to cope with, or totally avoid,
complexities or constraints. Quality of the decisions may be greatly affected as a result.
Automatic decisions may present a different case as it may consider it appropriate to dispense
quickly with “no-brainer” or low-value decisions.

Automatic or Intuitive Decision-Making -- Decisions by Rote

Michael Connor is a commercial loan officer at Broad Street Bank. He has received a
request from one of his clients, Zumak Corporation, to increase its credit line from ten to
fifteen million dollars.
Zumak has excellent credit rating and payment history. It justifies its new request with its
plans to acquire an integrated machining center in the near future in order to service a
long-term order it has received. Mostly, it will finance the machining center with working
capital but needs a short-term loan until new revenues can cover the shortfall. Based on
his knowledge of Zumak and its people, Mike quickly reviews their credit history on his
computer, decides that this decision is a “no-brainer,” and approves the request without
additional analysis.
When experts are faced with a situation of a type of which they have prior understanding,
they often recognize the characteristics almost automatically and without need to perform
extensive problem-solving. In other words, they have automated their knowledge about such
cases to such an extent that they do not have to reason consciously to deduce what to do.
Instead, they may perform a powerful automatic pattern recognition and “leap-frog” to a
conclusion and decision within seconds. We use automatic decision-making as part of our
regular knowledge work when we deal with routine decision situations and whenever we use
extensively internalized knowledge. A major reason for internalizing knowledge is to make it
readily available for automatic use. In these cases, we rely almost exclusively on routine
decision-making that often is based on case-based reasoning.
There are drawbacks to automated decision-making. Automated decision-making is
normally hidden. Experts may have automated their knowledge to such an extent that they
cannot explain why they choose a particular decision or communicate its details to
implementers. Another drawback is that their decisions may not be creative. Instead, they
may be “tried and true.” In addition, they may reflect prior conditions and not easily adapt to
new situations as the world changes.
For automatic decision-making we primarily use automatic knowledge of reference cases
that describes the situation more or less precisely. When the situation matches a known
reference case whose handling also is known, the decision to apply the standard solution is
automatic and routine. If the reference case is relatively similar, extension through
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 327

interpolation between several reference cases or extrapolation or explication from scripts and
schemas may also be automatic. Only rarely do we use any systematic knowledge about
decision methods or pragmatic knowledge in these cases to evaluate the situations in terms of
implications for how well they otherwise satisfy the criteria for the situation.

Snap, or “Seat-of-the-Pants” Decision-Making

Dennis Smart is production supervisor in DCO’s cement plant. Two control operators
approach him with what they consider to be a scheduling problem. They are both expert
kiln operators and have been scheduled for the same night shift while only two rookies
have been scheduled for the preceding evening shift. The two rookies have been known to
have problems controlling the kiln and have left it upset for the next shift to cope with.
Now the two senior operators want the schedule changed to avoid operating problems
carried over to the night shift. Therefore, they propose that one of them change place
with one of the rookies.
Dennis is used to gripes from the operators. He takes one look the situation, does not ask
any questions, and decides immediately that the schedule should remain as posted. He
tells the operators that it is about time the two rookies learn to control the kiln by
themselves and that if they upset it, it will not be by much. He concludes by adding that, if
the kiln is upset, the two senior operators will be able to “rescue it” on the night shift.
Dennis does not want to listen to the operators who feel that the rookies would learn
faster and much better if they worked with an experienced person who could guide them
and explain how to do things right if they make errors. He also does not want to take into
account the cost of off-spec clinkers produced during a possible upset. His main reasons
for making a quick decision is that it would be too cumbersome to reschedule (if he makes
the change, a rescheduling will be needed, which will require several additional changes
for the following week). His immediate judgment, is that it is more important to make a
quick decision and get on with the other work that is waiting.
Snap decisions are often based on prior judgment and the immediate first impression of
the situation. The decision maker may use the available knowledge and information with only
cursory examination of risks and other implications and with no further analysis. Snap
decisions are often based on selecting alternatives that come to mind very quickly or that have
been presented to the decision maker. The ability to make snap decisions is often considered
a desirable characteristic. However, it may be an indication of arbitrary behavior by a person
who likes to be recognized as a “decisive decision maker” and can be mistaken for deeper
understanding and expertise.
On the other hand, snap decision-making is often correctly undertaken by the decision
makers who consider the consequences of the decision to have low value (i.e., the cost of
being wrong is less than the cost of investing the extra time to make a more considered
decision). For low-value decisions snap Decision-Making is often the appropriate option. It
may also be very appropriate for other decisions where the decision maker has extensive
knowledge.
The knowledge we use for snap decision-making is to a large extent automatic domain
knowledge which allows us to proceed without giving it a second thought -- without checking
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that the situation actually corresponds to prior experience and reference cases. Instead, we use
readily available pragmatic knowledge to perform quick scans of the options and, to a lesser
extent, to evaluate potential consequences. Only rarely do we use systematic knowledge of
the situation or of decision methods.

Fixed-Idea Decision-Making

Tom Powell, PaxCo’s president, is considering building a $5 million bulk terminal outside
St. Louis. The concept has been circulating around PaxCo for more than a year and has
been the pet idea of John Kerr, VP of sales. Over the last few months, the idea has taken
on momentum with the whole sales force coming in behind it. The engineering
department has surfaced unsolicited concept memoranda in its support and the local sales
manager has located several suitable sites. Ralph Moen, the conservative VP of finance
who always fights John Kerr, has even analyzed the idea and has concluded that it is
feasible and sound. It seems that everyone in the whole company now supports the idea.
Tom also thinks it would be a good solution.
However, Tom has a small concern that PaxCo has not considered if other alternatives
should be explored. Nor has anyone analyzed if the size of the plant matches present and
future demands. But since the idea has everyone’s approval, Tom decides to ignore his
concerns and proceed immediately for three reasons: (1) building it now with everyone
behind it will be easy and efficient; (2) the idea must be good since no one has any
objections; and (3) by agreeing, he cannot be faulted for making a bad decision.
Fixed-idea decision-making takes place when a person or an organization acts on a single
idea that has grown increasingly more dominant and “taken on a life on its own” to the point
where no alternatives are being suggested or even considered worthy of study. We may find
this kind of decision-making when an idea or an alternative is developed by a strong
individual who then works the political circuit and obtains a pre-decision consensus that is so
strong that everyone jumps on the bandwagon.
We also find fixed-idea decision-making in crisis situations where many are prone to latch
onto the first feasible alternative that presents itself even though it may be marginal. The
objective in these situations seem to be to find an acceptable approach and to proceed to put
the undesirable situation behind.
In general, fixed-idea decision-making is not desirable. It takes strong knowledge about
decision methods, broad knowledge, particularly idealistic and systematic, about the decision
domain, and excellent communication and social skills to move the organization to consider
the challenge in a more comprehensive manner.

Arbitrary-Alternatives Decision-Making

Tom Singley, the Chief Financial Officer of Tangent Corp, a small ten-million-dollar-a-
year, successful software company, needs to acquire and install a management
information system. Present systems are virtually nonexistent and management suffers
from lack of accurate and timely financial and operating information. Tom and his chief
accountant have obtained three bids from small financial systems companies that they
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 329

have previous experience with. None of these systems addresses operating information to
any great extent.
George Hutton, one of Tangent’s senior software designers, has voiced his concern to
Tom that the broader information needs of Tangent have not been determined and may
not be served well. Nor have any of the software specialists been consulted to ascertain
that the new system will be compatible with existing systems and architectures. George
also has suggested that other vendors that he knows about be invited to bid since they
provide systems with broader scope.
Tom decides that the present alternatives, arbitrary as they may be, are enough and does
not want to take more time to consider additional options. Ultimately, Tangent chooses
one of them. After it is installed, it is determined that the system is too limited and
hampered by its incompatibility with existing architectures and will need to be replaced
within the-not-too-distant future.
Unfortunately, arbitrary-alternatives decision-making is quite common for many reasons.
Many decision makers will collect the first alternatives that present themselves and soon
decide that they have enough alternatives, even though none of them may address the real
needs of the situation. For example, we find this behavior when decision makers have little
understanding of the situation that they are about to make decisions for. We also find
arbitrary-alternatives decision-making when there are no criteria for what a good decision
requires, when there is limited time, or when the decision maker wishes to exclude others
from participating.
When the decision maker has good idealistic knowledge of what is desired as a result of
the decision, arbitrary-alternatives decision-making is typically avoided. At other times, if the
decision maker does not have systematic knowledge, may delegate the decision. And when
missing detailed knowledge, s/he might delegate to others analysis and considerations
requiring such knowledge.

Dominant-Factor Decision-Making

Maggie Hogan is a product manager at Appie Corp. She is responsible for product
development and marketing for Appie’s kitchen utensil products. The product she is
working on is a new, high-technology can opener that she has scheduled for introduction
in five months. Unfortunately, she has just become aware that Appie’s major competitor
plans to release a similar can opener at about the same time, perhaps even a few weeks
earlier. From her information, she gathers that it will be a little less sophisticated than
Appie’s but she is afraid that it will steal too large a market share unless she beats it to
the market.
Maggie calls a meeting of her development, production, and marketing teams to explore
which options they may have. They determine that their present schedule is sound and
that they can complete development, tooling, market introduction with advertising, and
produce and place enough merchandise in stores by the previously agreed date for a can
opener with all the approved features.
The group also agrees that they have an option to introduce the can opener two months
earlier if they can delete two of the advanced features, which make it easier to operate the
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can opener and keep clean. The remaining features will still make it very attractive.
These changes will also make the can opener slightly less expensive to make. However,
there are two options for producing the desired finish. The more expensive option is
quicker to implement while the less expensive, but equally attractive, cannot be completed
within two months. Once one finishing method has been implemented, it will be costly to
change -- almost as costly as implementing it in the first place.
Given these inputs, Maggie has to make the decision for how to proceed. She decides that
timing is the overriding factor. Consequently, she decides that she will accelerate the
schedule and introduce the can opener in three, instead of five months. The can opener
will have the more expensive finish and be without the two good features. To compensate
for the more expensive finish, she decides that the price will be the same as has been
planned. Maggie will risk the possibility that the competing can opener might be slightly
better than her new product and, therefore, steal market share once it becomes available.
By then, she feels, Appie’s product will already have established itself in the marketplace,
preempted a number of sales, and have earned two months of early revenues.
Decision makers use dominant-factor decision-making to simplify complex decision
situations. Quite often such simplification leads to sub-optimization and undesirable results.
In method and intent, it is similar to dominant-factor reasoning although in many respects it is
much more complex as illustrated in Maggie’ s case. We encounter dominant-factor decision-
making frequently and in all kinds of situations. For example, in a hiring decision, the
decision maker only considers the candidates' expertise, not their asking salaries; or equally
likely, the decision maker considers only the asking salary, assuming that all other
characteristics meet the criteria.
Dominant-factor decision-making is frequently used as a basis for purchasing and
contracting decisions. In these cases, the dominant factor may be considered to be the cost of
the transaction which, therefore, becomes the decisive factor after all other characteristics
have been checked to ensure that they pass a set of fixed minimum criteria or “hurdle values.”
In fact, this approach is deliberately used to simplify decision situations that in reality are
complex multi-criteria decision situations (decisions with multiple objective functions).
Factors such as quality, delivery time, and so on, are specified in terms of minimum
acceptable levels and the transaction is declared acceptable if the factors pass these levels.
This eliminates the opportunity to consider tradeoffs between quality and costs, for example,
and has led to a myriad of extraordinarily expensive and arbitrary decisions in private industry
as well as in the Federal Government. For example, we have all heard the stories about the
$2,500 toilet and the $500 “standard” crescent wrench.
The knowledge we use for dominant-factor decision-making is to a large extent domain-
related systematic and pragmatic, as indicated in the example where Maggie and her team
used systematic knowledge to project outcomes and devise new alternatives. They used
pragmatic knowledge to assess the detailed aspects of the alternatives. Since dominant-factor
decision-making is relatively ad hoc, we only rarely will use any systematic knowledge about
decision methods.
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 331

Dominant-Hypothesis Decision-Making

Chuck Potter is one of ApCo’s regional sales managers responsible for bulk chemicals.
One of his large distributors has repeatedly reduced its orders over the last several
months. Chuck’s sales representative tells that he has tried to come to grips with the
problem but has come up empty-handed. Chuck has himself talked to the distributor and
has been told that the reduced orders are the result of less demand from the small
businesses that use the chemicals for metals cleaning and finishing. However, Chuck has
learned that those businesses as a group are enjoying increased sales. He is not aware of
any new cleaning or finishing methods or substitute chemicals that can explain what is
happening. He hypothesizes that there can be several reasons for the reduced demand.
All will require quick action:
• There is indeed an alternate method for cleaning and finishing metal that is more
attractive and does not require ApCo’s chemicals. (He does not believe this).
• There is a competing distributor that sells the chemicals to the end-users at more
favorable rates and provides better service. (He has no indication that this is the case.)
• His distributor favors another chemical company and this change in allegiance may have
been caused by:
-- Lower prices. (If that was the case, his sales rep would have heard about it and
reported it)
-- Better service -- perhaps in the form of just-in-time service
-- Different terms -- perhaps as better credit terms or even consignments instead of
outright sales. (His sales rep would have told him.)
-- Ordering or billing problems. (He would have heard about customer complaints.)
-- His sales rep is not performing his job
Chuck looks at the options and decides that the real problem most likely is that the
distributor favors another supplier and has started to receive significant shipments from
it. He suspects that the reason is that his sales representative is not sufficiently attentive
and vigilant. Chuck, therefore, plans to call on the distributor and will be ready to make
significant changes to get the business back.
The general strategy of dominant-hypothesis decision-making is to: (a) consider several
hypotheses for the situation and choose the hypothesis that explains most of the observed
conditions; (b) assume that only one basic thing is the matter with the situation; and (c) select
the alternative for how to handle the situation that best addresses the dominant hypothesis.
For example, physicians are often taught this strategy to decide how to treat patients. They
should assume that there is only one thing wrong with the patient and that they need to correct
that.
When using dominant-hypothesis reasoning, one should choose the hypothesis that leads
to the best remedial strategy. If there is a toss-up between root-cause hypotheses A and B, but
the presence of A would require prompt handling -- and that action would not jeopardize the
handling of B -- then , A should be chosen until more information can be obtained.
The knowledge we use for dominant-hypothesis decision-making is basically systematic
for the primary work-related domain. We also use systematic and pragmatic methodological
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knowledge to diagnose the situation and to develop appropriate approaches.

To avoid engaging in dominant-hypothesis decision-making, when a more appropriate
approach is needed, we need to possess greater idealistic and systematic knowledge. We also
need knowledge of adjacent work-related domains and in many instances world knowledge.

Incremental “Muddling-Through” Decision-Making

Denise Quigley is Director of Technology in the Information Systems Division at Bolac

Industries. She faces a situation where Bolac needs to implement local area networks
(LANs) in seven locations which now have none or inadequate installations. In addition,
Bolac has LANs of different ages, makes, and often incompatible architectures, in thirteen
other major locations around the world.
As Denise investigates how to approach the situation, she determines that Bolac has
several alternatives. Most of the new locations pose rather special requirements. One
has high speed real-time operations with high data transmission needs. Another has a
small LAN in place for its engineering work stations but needs a facility-wide network that
is compatible. A third is converting from a mainframe with a few terminals to “PCs on
every desk.”
Denise thinks that Bolac ideally should “bite the bullet” and use the opportunity to start
converting to an advanced LAN solution for gradual implementation throughout Bolac as
a company standard to serve all LAN needs for the next decade. The other options are to
continue the present piecemeal strategy of implementing lowest-cost specialized solutions
everywhere although it will continue to lead to considerable incompatibilities, technical
bridging problems, and reduced capacity and capability. Short-term, the present strategy
is less costly and disruptive. Long-term it is much more costly and impedes the
operational capabilities of the organization in many ways, including reduced capability to
upgrade to more modern workstations, database architectures, and other office and plant
automation approaches when these become desirable.
There are three alternatives for a standard LAN solution. Each will serve Bolac well for
more than a decade. All of them, however, require considerable additional expenditures
in the first year over and above the specialized low-cost solutions.
The decision on which alternative to pursue lies with Don Tucker, Bolac’s Chief
Information Officer and Denise’s manager. Denise presents the alternatives and their
implications to Don, who weighs the pros and cons of each and also considers such issues
as established budgets, political consequences, and available in-house expertise. Based
on these considerations, Don decides to continue the present strategy to implement the
specialized low-cost solutions for each location and postpone any decision to create a
standard for Bolac’s LAN technology. He justifies the decision by its low cost; lack of
need to rejustify and renegotiate budgets; continued reliance on present -- albeit
somewhat outdated -- in-house LAN expertise; and lack of disruption to several of the
departments. Since it alleviates the immediate needs for the seven locations, Don decides
to ignore that his decision will lead to low capability. He also disregards that the
specialized local solutions will also be temporary and will need to be scrapped whenever
Bolac adopts a uniform standardized LAN architecture and will therefore, be more
expensive in the long run.
Depending upon the circumstances, incremental decision-making may be the worst
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 333

possible or the very best way of handling a situation. This approach is based on making
narrow decisions and suboptimizing them to be as small as possible and with a scope that
covers the narrowest part possible of the challenge. It frequently considers the last analysis
and decision made in the area involved and builds upon these by making minor adjustments or
expansions if that is defendable in the current situation.

Incremental decision-making is geared to: (a) continue the status quo or (b) “put out
fires,” that is, continued implementation of good policies or small adjustments to fix
shortcomings in present situations. It is attractive, in a detrimental sense, because it permits
avoidance of difficult or elaborate cognitive tasks that may require extensive knowledge and
effort. Over time, however, incremental decision-making accumulates to large decisions that
may prove to be arbitrary and often lead to undesirable and unanticipated results unless used
deliberately to implement a good strategy step-by-step.
Incremental decision-making is often wrongfully applied when the decision maker has
limited knowledge of the overall goals of the general situation of which the immediate
challenge is a part. In such instances, the decision maker can see no reason to expand the
scope of the decision-making process.
In spite of its potential problems, incremental decision-making is useful and can be highly
appropriate in situations where such decisions are part of a continued series of implementing
decisions of a policy that still is valid and good. In many similar situations where a good goal
is known, there is nothing to be gained from going back to first principles to reevaluate the
underlying reasons.
Proper application of incremental decision-making requires excellent knowledge of how
the present challenge relates to the direction of the general situation of which it is a part. It
also requires good understanding of the continued validity of the underlying premises. In all
instances, application of the approach depends on assessing how the available alternatives will
affect the overall goals as well as understanding how it will affect the immediate situation.

Mixed-Scanning Decision-Making

Hollis Crocker is Vice President of Project Staffing at Dapper Engineering. Dapper’s

business had expanded and Hollis needed to reassess the approach used for on- and off-
site project staff selection and assignment. According to the present approach, which was
difficult to administer, the Management Committee appointed the project manager while
Hollis as the VP-PS and his staff of two selected and assigned the project personnel
pending approval by the project manager. With the increase in Dapper’s business, over
one 150 new engineers had been added to the different specialty department staffs. The
hiring workload became too great, the selection was not always the best, and a better
approach had to be developed and adopted.
Hollis assembled a taskforce with representatives from Human Resources, Business
Development, and the major departments involved to develop a staff selection approach
that would work better under the new circumstances. The taskforce quickly developed
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several alternatives, ranging from minor modifications of the present approach to

selection procedures that would rely on a large central project staffing group with full
overview of every engineer’s experience, skills and personal characteristics, schedules,
and commitments, and to project managers staffing their own projects. Over a dozen
different approaches were identified and sketched out. After a preliminary evaluation it
was found that only three alternatives were suitable for further exploration. The other
alternatives were rejected for different reasons. For example, a large central staffing
group would be a Utopian dream since it would require unrealistically good insights into
each engineer’s capabilities and commitments. A computer-based “skill inventory
system” was judged to be too time-consuming to implement. Having the project manager
select his own staff would be too parochial, lead to too many conflicts and arguments, and
create unbalanced teams where the project manager’s weaknesses would be amplified.
By outlining the remaining alternatives in greater detail and using the broad perspectives
of the taskforce to generate creative suggestions to be criticized, a final solution emerged.
The solution involved creating a small group of senior and long-term Dapper employees
from different parts of the company to become Project Staffing Directors (PSDs) under
Hollis’ direction. The PSDs would receive initial education to develop deep
understanding of Dapper’s corporate goals and good staffing strategies for different types
of projects. They would also be given access to all relevant personnel and scheduling
information with support from readily available computer-based tools.
Each project manager would be assigned a PSD part time. The two would collaborate as
equals and negotiate with department heads and individual engineers who under this
system would be given the opportunity to have greater inputs to their assignments.
Department heads would continue to be responsible for the quality of work and
professional development of staff assigned to the projects, and for their general schedules
and availability.
To ascertain that the approach would be feasible and acceptable, Hollis and the taskforce
developed a detailed implementation program to appoint the PSDs, provide them with
additional education, create the necessary organizational structure, and develop the
computer-based support systems. They also discussed the approach in detail with nearly
all department heads and a number of project managers and made minor revisions to
alleviate some problems that were uncovered during this process.
Mixed-scanning has possibly always been the most common approach to in-depth and
thorough decision-making. We use this method when we approach a challenge that requires
that we go into a fair amount of depth to develop several “good” alternatives and test them for
validity and expected performance before we can select the best. Mixed-scanning may even
be considered to be a “quasi-vigilant” decision-making approach. The approach was first
described by Etzoni, who outlined a script for mixed scanning decisions consisting of the
following five steps:1
1. List all relevant alternatives
2. Examine all alternatives and reject those with “crippling objections”
3. Repeat Step 2 in increasingly greater detail until only one alternative is left
4. Before implementing:

1 From Etzoni (1986), “Mixed Scanning Revisited.”

Solve Problems! Make Decisions! -- Use Knowledge Creatively! 335

-- fragment the implementation into several steps

-- divide the commitments to implement and the assets into serial steps and maintain a
strategic reserve
-- arrange implementation to let costly and less reversible decisions appear later in the
implementation process
-- design a schedule for additional information collection
5. Review while implementing and replan as required
From our perspective (we have benefited from much additional thinking by other decision
theoreticians like Simon, Janis, Kahneman, Tversky, Raiffa, Keeney, and others), Etzoni’s
script captures and highlights the particular nature of the process but disregards the creative
aspects of the analysis and synthesis phases for generating alternatives.
The mixed-scanning approach can be tailored to utilize available time and resources to the
fullest and thereby provide very valuable alternatives that are not artificially constrained by
the simplifying coping approaches introduced above. At the same time, however, although
developing some “good” alternatives, the approach is still limiting since it draws from an
arbitrarily limited sample space, potentially with limited dimensionality, where each
alternative can be considered a sample. (Due to time and resource constraints the sample may
be only partially developed, i.e., be less than optimal for its particular solution direction.)
The reduced dimensionality that may result from mixed-scanning decision-making is in
many ways identical to a situation where a bridge design team designs a suspension bridge
based on only the perspectives of static loads while ignoring the effects of dynamic loads
from strong winds and heavy, fast traffic. They spend the time and effort required to arrive at
what they judge to be a sound and appropriate design. As has happened with many such
bridges in the U.S., Europe, and Australia, the static safety was not a sufficient criterion and
many fell down during heavy winds. The inadequacies were evident! In organizations and
business bad decisions are not always as easily detected and verified. Yet, we strongly
suspect that a large proportion of such decisions are flawed, similar to the bridge design
decisions.

Satisficing Decision-Making

Phil Post, Hull Corp’s plant engineer, is facing the dilemma of how to approach
rebuilding the motor control center that was destroyed in yesterday’s fire. Time is of the
essence and he has a limited budget.
Phil and the electrical engineer, Tom, sit down to explore their options. They have good
and recent drawings (which they tell each other is unusual), and would be able to
reconstruct the control center using the same type of equipment that was destroyed. That
equipment was due to be modernized, but new engineering plans had not been made and
there is no time to redesign the whole center. There is another option that they are
familiar with. One manufacturer offers “PowerSwitch,” a line of relatively modern
equipment that replaces what was destroyed on an almost one-to-one basis and therefore,
can be installed without significant redesign. That equipment is good, but does not offer
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all the features that Phil and Tom had planned on. It will, however, upgrade the center to
a fair degree. There may be other manufacturers and other solutions that will serve the
purpose even better, but they do not know about any for certain.
Phil and Tom decide that since PowerSwitch will be able to do the job and avert future
fires, it will be “good enough” even though it is limited compared to their goal for the
plant. They decide to not look any further and order PowerSwitch for immediate
installation.
When a decision maker looks for an option that is just "good enough" s/he satisfices.
Herbert Simon introduced the concept of satisficing1 to characterize the expedient behavior of
decision makers who stop short of finding the best solution that fulfills all criteria to the best
degree.
Businessmen may decide to invest in a new enterprise if they expect it to return a
“satisfactory profit” without bothering to compare it with the other available investment
alternatives. Typically, a number of alternatives are examined sequentially until one, found to
be “good enough,” is chosen without further analysis.
It has been found that satisficing decision-making -- and problem-solving -- is the most
common approach used even when people are quite serious about finding and pursuing the
best alternative. In reality, there are always limits to available time, resources, and patience
and these limits tend to stop the process and force closure before an optimal result has been
identified.
From a decision maker’s perspective, it is important to have sufficient knowledge about
the situation to understand when it may be prudent to stop the process -- and when it is
premature. To have this insight, specific knowledge is required about the expected
performance of the identified alternatives, the requirements of the situation, and expectations
for what can be achieved by continuing the process. It is also required that the decision maker
understands the general decision and problem-solving process that is pursued.
Much too often, decision makers have a lack of understanding of these areas and will cut
the process short prematurely and with undesirable results for the corporation. The decision
maker satisfices -- but without well-founded judgments of the implications of the decision.

Vigilant Decisions

Hattie Fuller is Marketing VP for ProCold, a medium-sized manufacturer of industrial

freezers. In conjunction with the Management Committee headed by the CEO, she has
determined that ProCold needs to make a deliberate change to become dominant in their
market niche. ProCold is now number four, but has arguably the best products and is in a
very good financial position, which allows them to make a big move, should they decide to
do so. Their top competitor has management and product problems but has the major
market share since historically it was the only sizable supplier. The other two competitors
also have problems.
As they see it, ProCold’s only option is to make a significant change. If they continue with

1 Simon (1976), Administrative Behavior.

Solve Problems! Make Decisions! -- Use Knowledge Creatively! 337

business-as-usual, they expect to lose market share and possibly become an unprofitable
“also-ran.”
The Management Committee has appointed Hattie to lead the effort to identify what
ProCold should do. She works closely with the committee and has a small taskforce of
three of the brightest professionals from Engineering, Marketing, and Finance to help
her.
ProCold’s major problems are that they have limited geographic penetration and limited
name recognition. They have always sold direct to ensure excellent sales relations but
have had problems delivering good after-sales service (they contract service to a national
service chain). In addition, their manufacturing facilities will have limited capacity if
sales would increase. On the positive side, they have an excellent reputation for
application engineering, technical sales support, and initial installation and start-up.
Their products have the best on-site performance and highest manufactured quality
compared with competitors’ products. Their prices are also comparable with the
competitors’ due to ProCold’s low internal costs.
Hattie has worked on this challenge for two months and has developed several options.
Most of them are still being explored to determine precisely how they can be implemented
and what their implications will be. The options that seem most interesting cover a wide
range and while some are stand-alone, others could potentially be combined. In no
particular order the options are:
• Merge with one of the three larger competitors. Sell out to provide buyer with superior
product design and manufacturing facility
• Buy competitor Atlan (No. 3), who has a complementary geographic market, a reseller
network, and outdated products
• Increase the size of sales staff to cover the whole country
• Switch from direct sales to a national agent network
• Embark on aggressive advertising and PR campaign
• Expand the Initial Installation Department to include an in-house after-sale service
organization with locations throughout the U.S. Cancel the present service contract
• Increase manufacturing capacity in present location
• Increase manufacturing capacity. Build new plant in different location
The taskforce meets with the Management Committee in formal weekly sessions and
informally with the CEO and other members on a daily basis.
During this period, Hattie and her taskforce, with the help of everybody else, have shaped
and reshaped the options so that they have become quite attractive and feasible. At the
risk of letting their competitors know too much, the CEO has even explored potentials for
mergers with competitors through an intermediary. The criteria for what the best course
of action will be have also been developed and have been a major driver for shaping the
options.
Initially, everyone thought that ProCold was in the business of manufacturing and selling
industrial freezers. Therefore, the corresponding criteria dealt with how well they could
design, manufacture, and install the products leading to the desired financial
performance. As they worked with the challenge, it became clear that ProCold needed to
look more broadly at the business it is in. In the long run, ProCold is in the business of
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providing their customers with cost-effective capabilities to preserve food around the
clock. That realization was a whole new paradigm for ProCold’s management. It
resulted in new criteria and shaped the development of options in totally new directions.
Given its strengths and its new perspectives, ProCold decided to invest heavily, expand its
sales staff, expand its installation department to include service, and expand its present
plant as volume rose. It also built a new customer service function, embarked on a PR
campaign, and offered new guarantees for system availability and service. As part of its
overall program, to minimize down-time and demand service calls, it retrofitted its larger
models with monitoring computers that regularly would dial into ProCold’s maintenance
computer to report on the condition of the systems.
When a proactive organization faces an important challenge, it often pursues the challenge
with vigilance to ensure that it has taken into account all factors, developed the best
approaches, and “left no stone unturned.” It adopts vigilant decision-making. Properly
performed, vigilant decision-making ends up being creative. It does not necessarily require
large investments of time and resources if the decisions are made within areas where the
decision makers and their staffs have good experience. It does, however, take considerable
dedication to excellence to be willing to pursue the process to obtain the best solution.
Irving Janis and Leon Mann1 presented a model for the vigilant decision-making process.
According to Janis and Mann, the vigilant decision maker:
1. Thoroughly canvasses wide range of alternatives
2. Surveys the full range of objectives and values implicated by the choice
3. Carefully weighs costs and risks of negative and values of positive consequences for each
alternative
4. Intensively searches for new information
5. Correctly assimilates and incorporates new information
6. Reexamines positive and negative consequences of all known alternatives before making
the choice
7. Makes detailed provisions for implementation with special attention to contingency plans
to counter possible risks
Janis and Mann’s book and Janis’ later book,2 offer a whole foundation for vigilant
decision-making with excellent examples of both mismanaged and successful applications of
vigilant decision-making.
Vigilant decision-making requires extensive and broad knowledge. The knowledge must
cover the primary and adjacent work-related domains at all cognitive knowledge levels and
must cover knowledge of knowing, world knowledge, and other kinds as well.

1 Janis & Mann (1977), Decision Making.

2 Janis (1989), Op. Cit.
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 339

Factors That Affect Decision-Making

IS DECISION-MAKING RATIONAL?

Traditionally been it has hypothesized that decision makers operate rationally (i.e., with
rational reasoning, rational objectives, and rational implementation of their decisions). That,
however, has been found not to be the case, at least according to observable objectives,
values, and reasoning processes. Other indications suggest that if we knew all the observable
and hidden, explicit and tacit factors that decision makers take into account, we might be able
to determine that they indeed operate rationally. That would require that we explore the
objectives, the actual mental models that decision makers use to project outcomes and
develop proxy values, the actual basic values and motives, and the perceived uncertainties.
Since most of these factors are hidden, we tend to determine that the decision makers’
behavior is nonrational, or at least not fully understandable. As we look at all the factors that
influence and constrain decisions beyond the factors that we would normally consider to be
the determining set, we should not be surprised.

FACTORS THAT AFFECT DECISION-MAKING NEGATIVELY

In addition to such obvious negative influences as insufficient knowledge, information,

time, and resources, many other factors affect decision-making significantly and often
covertly. Some of these are outright constraints, others wield strong influence and create
significant tradeoffs, whose effect will tilt decisions in unexpected directions. We typically
consider most of these factors “subjective” and may even consider them inappropriate.
However, it is very important that knowledge professionals be aware of these factors since,
often, they have greater influence on decision-making than “legitimate criteria.”
Knowledge-intensive work is not without problems. We present some of the most typical
of these problems in Table 8-5. Following Janis (1989), we can also categorize the factors
that affect decision-making negatively into four classes: situational, cognitive, affiliative, and
egocentric or self-serving factors.
Knowledge professionals who analyze decision situations must be on the constant outlook
for decision factors like those listed in Table 8-5. The presence of these factors is normally
hidden, even suppressed, by both individuals and the organization. Therefore, the
professional must gain understanding of the positive and negative factors that affect the
decision-making before being able to synthesize approaches to improve the situation.

Situational Factors

Situational constraining factors are associated with insufficient time, insufficient

manpower, insufficient knowledge, and so on. These factors are often observable and openly
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discussed. Yet, they may not be included explicitly into the decision criteria and, although
they may be recognized, no attempts made to alleviate them. Instead, they are frequently
bypassed by adopting a simplifying decision-making approach.

Cognitive Factors

Cognitive factors point directly to shortcomings in knowledge such as a perceived or real,

but unrecognized lack of dependable knowledge. Many of these factors are indicated or
implied in Table 8-5. In addition, there are other factors such as ideological commitments,
perplexing complexity of the challenge, and strong familiarity with a particular decision-
making style and related approaches to the exclusion of other, more appropriate ones.

Affiliative Factors

Affiliative factors are often hidden and although they can influence decisions to a large
extent, may not be recognized. However, it is important that they be explicated by the
knowledge professional. Most may be legitimate and the decision will be better if they are
recognized. Some affiliative factors include: “rigging” of acceptance by steering the decision
towards what will be viewed favorably by others; need to obtain approval by people in the
organization who will participate in its implementation; need to preserve group harmony
(through “groupthink”); continue propagation of desirable organizational cultural features;
attempts to avoid punishment; and need to maintain status, power, compensation, or social
support.

Egocentric or Self-Serving Factors

Egocentric or self-serving factors typically are both hidden and inappropriate from the
organization’s perspective. They cover a wide range including such examples as: personal
advancement such as greed or desire for fame -- “What is in it for me?” or emotions such as
anger, elation -- “Fantastic! Let us do it!” In analyzing decision-making, it is very
important, particularly for repeated situations, to understand underlying egocentric factors that
tend to steer decisions in certain ways or that force decision makers to choose approaches or
styles that might be less effective.
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 341

Table 8-5. Knowledge-Intensive Work Is Not Without Problems!

Problem Root-Causes Typical Problem Characteristics
• May not be able to cope with complex problems
Limitations of • KISS or other coping strategies in complex situations
Human Intelligence • May be slow
• May be weak in secondary areas
• Different types of intelligences may have different needs caused by
different perspectives and mental representations and models
• May lead to labor/knowledge mismatches
Results of • May result in temporal discontinuities when different people or
Social Division of Labor departments tackle different tasks
• Different groups may “see through other worlds”
Information about the • Vital information is missing requiring guessing; may result in arbitrary
Situation Is Insufficient decisions
Information Is Confusing and • Information arrives piece meal, is disorganized, or organized for other
Not Organized. purposes but not appropriate for the present purpose
Proper Procedures Are • Workers may choose inappropriate but well-known methods
Unclear or Not Well Known • Methods for approaching the situation are complex and difficult
Criteria and Priorities that • In complex, multi-discipline situations problem-solving may be
Govern the Situation Are undirected, unfocused, and good alternatives may be disregarded by not
Unclear being recognized
Resources for Performing • Analysis will be shallow and inadequate
Required Work Are Missing • Synthesis will be arbitrary
• Assessment of outcome will be inadequate
Task Environment Is • Leads to lack of concentration on analysis, loss of line of reasoning,
Fragmented with Frequent time-consuming resumption of task
Irrelevant Interruptions
Situation Involves Imperfectly • Analysis and problem solution address symptoms -- not root causes
Known Processes • Process may address subset of factors needed to be considered leading to
improper solutions
Several Knowledge Areas • Requires expertise and balanced, congruent judgments in all areas
Must Be Integrated • Problem-Solving may be performed with too narrow perspectives if
integration is neglected
Knowledge-Workers Are Not • Problem-Solving may be pursued with wrong methods
Yet Experts • Insufficient knowledge may be available to deal with challenge
Complex Situation Changes • Problem-Solving may proceed without detecting change thereby basing
During Problem-Solving it on invalid premises
Time Is Insufficient • Sufficient information about situation cannot be obtained
• Appropriate methods to deal with situation cannot be pursued
• Psychological pressure and stress affect focus, judgment, ability
Knowledge-Workers Are • Knowledge-workers cannot, or will not, deal with situations that deviate
Inflexible from routine
Knowledge-Workers Are Not • Knowledge-workers do not have sufficiently broad knowledge to deal
Versatile with different situations
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Don’t Fall Prey to DEFENSIVE AVOIDANCE and HYPERVIGILANT Escape!

Two important decision-making approaches that are driven by egocentric factors are
defensive avoidance and hypervigilant escape. These approaches and their influencing factors
are discussed at length by Janis and Mann and later by Janis. These authors provide thorough
insights into when and why people resort to this kind of behavior.1
As the term indicates, defensive avoidance leads to postponements or even outright
neglect to make decisions. The reason for this behavior may be that the decision maker
considers potential outcomes undesirable. Quite often, however, the decision maker
procrastinates because s/he does not have the requisite understanding and knowledge to tackle
the challenge and, therefore, has no idea of how to approach it. Even when some knowledge
is present, the challenge may be unfamiliar, requiring a degree of mental effort that is
sufficiently large and painful and, therefore, to be avoided.
In extreme situations, the decision maker may become panicky, erratic, and hypervigilant
characterized by total lack of concentration and an arbitrarily focus on first this, then that, in a
chaotic manner. Such behavior happens in crisis situations when the decision maker has lost
perspectives and has no idea of which approach to pursue or issues to focus on.

FACTORS THAT FACILITATE DECISION-MAKING

A number of factors contribute to better decision-making. Some of them are under direct
control of the decision maker and can be enhanced by advance preparation. Others are
implicit in the organization’s practices and support capabilities, while yet others are inherent
in the nature of the decision challenge itself. Table 8-6 provides examples of ten factors that
contribute to good decisions.

IT TAKES CONVICTION TO MAKE DECISIONS!

Committing to making a decision takes conviction. In addition, it also takes vision and
ideas to make it clear that the available options are “good enough” and that it is unlikely that
other options will yield a much better result. Often considerable understanding -- knowledge
-- is required to bring about the necessary conviction, visions, and ideas.
Core Corporation’s management committee was faced with making a major decision
regarding reengineering its marketing, sales, and manufacturing operations. The project
would be performed by the in-house reengineering staff assisted by a few outside
specialists and would result in redistributing knowledge-intensive activities, change work
and management practices, many decision rights, and organizational responsibilities, and
introduce a new information support system to make it all possible. The problem was
made more complex since considerable policy and cultural changes were also required
for the project to be successful.

1 Janis & Mann (1977), Op. Cit., and Janis (1989), Op. Cit.
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 343

Table 8-6. Ten Factors That Contribute to Good Decisions.

Decision Factor Potential Results
Factors Created by Advance Preparation
• Better understanding of challenge
Excellent Knowledge • More accurate analysis and characterization of challenge
• Generation of more creative alternatives
• Selection of the best available alternative
Good Understanding of • Decision addresses relevant issues
Decision Criteria • Better implementation of overall strategies
• Selection of the most suitable alternative
Factors Resulting from Good Practices and Support Facilities
Low Cost of Information • Better insight into what the situation is about
• Reduces risk since challenge will be better defined
Low Cost of Analysis • Produces better characterization of challenge
• Reduces risk through more thorough analysis
• Generates more creative and innovative alternatives
Low Cost of Synthesis that have greater value
• Provides more valuable decision
Timeliness • Decision is more valuable when made in time
• Decision is easier to implement
Factors Inherent in the Nature of the Challenge
Shared Acceptance • Greater support by those affected with fewer side-effects
• Decision is easier to implement
Good Decision • Makes decision more attractive and implementable
Alternatives • The best alternatives are identified and characterized
Implementability • Decisions that are easier to implement lead to more thorough
implementation with greater realization of benefits
• When good benefits are expected, investment in decision
Good Resulting Benefits process is greater hence ensuring a better decision
• Decisions with greater benefits are easier to implement

Pete Core, the Chairman and CEO was not convinced that this was the right thing to do
and members of the management committee were concerned that GC’s expertise was
lacking. They voiced their concerns to the reengineering staff and together they decided
that the management team needed to develop a much better understanding of the whole
situation. In particular, the reengineering team and others needed to help them firm up
their ideas and visions for what could and should be done considering the company’s
needs and the market situation, and to gain conviction that it could be done with the
resources at hand and would be worth it.
With the help from marketing, manufacturing, human resources, and organization
development, the reengineering staff focused on developing the management team’s
knowledge and understanding in nine different areas. After considerable exploration and
discussion, the management committee felt that they would be willing to act. They made
the decision to go ahead, commissioned the project, developed the action plans, and the
344 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

project was undertaken and completed with realization of most of the expected results to
everyone’s satisfaction.
Core Corporation’s decision situation and understanding process that in the end led to
undertaking the reengineering project is illustrated in Figure 8-8. The reengineering staff
aided by partners throughout the organization, provided management with complementary
understanding -- knowledge -- in all the nine areas. This scenario is typical in that the
decision makers must frequently be helped to understand the broad position of what is
proposed, the proposal itself, and the implications and capabilities to make it happen. The
decision makers need to be given confidence in the visions and ideas that they themselves
have as well as those provided to them. Likewise, they need to be reinforced to develop
conviction “that it can be done and that it is worth it.” Only then can they be expected to be
willing to change and resolve to act.

Figure 8-8. Example of Understanding in the Form of Transferred Knowledge Needed

to Develop Visions and Convictions Required to Make a Decision to Act.

Understand Understand Understand

What is Possible Availability
Competitors and
& Markets Understand of
Understand Desirable Resources
Understand How to Exploit Capabilities
Opportunity & Understand of Available Understand Costs
Company & Requirements
Capabiltiies Expertise Benefits of Resources
of Proposed
Proposed Actions
Understand Actions
Company
Needs

Visions and Ideas Conviction

for What Can and That It Can Be Done
Should be Done and
and Is Worth It
What Will Result
Management's
Mental Process
Willingness to Change for
& Resolution to Act Selecting and
Committing to a
Decision Alternative

Action Plans
& Actions

Changed Performance
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 345

The need to reinforce visions and ideas and be convinced that to proceed is desirable and
realizable is the same for both choice selection decision-making and creative decision-
making. In the latter case, decision makers often have greater insights -- at least after working
with the challenge for some time. However, the need for others to help make the situation
clearer remains the same and can often lead to considerable staff work.
It must be clear to everyone associated with decision situations that considerable
knowledge on many topics need to be internalized by the decision makers before they are able
to make confident and actionable decisions. They need goal setting and systematic
knowledge for some topics in the form of concepts and judgments. For others they need
factual knowledge: “What are the benefits? What are the costs? Which risks do need to
guard against? What is the pay-back? Do we have the capability and staff to carry it out?”

REMEMBER: GOOD DECISIONS ARE CREATIVE!

Often, decision makers do not synthesize new alternatives to explore and find the very
best ways to handle challenges. Instead, they engage in choice selection decision-making and
select alternatives from predetermined standard approaches that reflect safe, recognized, and
approved solutions. Such noncreative solutions may be generally desirable for highly
programmable and routinized challenges. They are particularly common within bureaucratic
settings where unacceptable costs may be associated with efforts to ascertain that nonstandard
and unconventional solutions follow policies and do not introduce unwanted risks.
In most organizations we find that unimaginative and non-creative Decision-Making, even
for crucial strategic challenges, is acceptable as long as it is “solid,” stays within the
organization’s guidelines and traditions, and is error free. That is not good Decision-Making
and rarely places the organization in a good competitive situation. It also is not what can be
expected from an intelligent-acting organization except in very limited circumstances.
As implied by the earlier discussion, synthesizing decision alternatives is a creative
process that requires considerable understanding both of the subject matter of the decision
challenge and of approaches to reframing and innovating. Equally important is understanding
by decision makers, their superiors, and associates that creative Decision-Making is indeed
possible and expected. Without such expectations, and without knowing how to go about
making creative decisions, it is difficult to achieve an intelligent-acting organization.

Situation Familiarity and Reframing

Creativity, as indicated, is to a large extent a function of reframing. The degree of

reframing that a decision maker is likely to undertake -- and hence the potential creativity and
quality of her/his decision -- is, among other factors, a function of how well the decision
maker knows the challenge. This function is illustrated in a general manner in Figure 8-8 for
proficient performers and experts.
346 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Figure 8-9. Illustration of the Reframing that Proficient Performers Are Likely to
Undertake Based on Familiarity with the Situation.
Degree
of
Reframing

Extensive

Expert
Some

Degree
Proficient Performer of
None Familiarity
with
Novel Situation Known Situation Automated Situation
with Resulting in Knowledge
Exploratory Explicit with Tacit
Decision Making Decision Making Decision Making

Focus is on Focus is on Focus is on

understanding finding the finishing the task
situation best approach and putting the
not on finding the approach to work
best approach

We can expect that when proficient performers encounter a novel situation that requires
exploratory decision-making, they will normally take the situation as presented without
attempting to reframe it. Experts on the other hand, will do some reframing although they are
also likely to be preoccupied with understanding the situation rather than finding a creative,
best approach.
When knowledge-workers encounter a known situation that is so complex that it requires
explicit, rather than tacit, decision-making, both proficient performers and experts will do
their best to reframe the problem before making a decision. In general, experts will reframe
to a larger extent than proficient performers due to their better knowledge. The focus in this
case is on finding the best possible approach.
When knowledge-workers encounter known situations that they can deal with tacitly using
automated knowledge, neither proficient performers nor experts are likely to reframe.
Instead, they will make “canned” decisions based on past experiences and judgments without
exploring if a better decision can be found. The focus is on finishing the task and
implementing the decision. As pointed out elsewhere, this is a problem with proficient
decision makers -- when the world changes, they may continue to make decisions based on
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 347

their outdated perspectives and judgments. They are in effect not learning and hinder the
organization by perpetuating their old values and behavior.

Level of Expertise and Quality of

Knowledge Work
EFFECTIVENESS OF DECISION-MAKING

We often think of an effective decision maker as an individual who makes timely

decisions based on the information at hand and without help from others. This view of
effective decision-making may be appropriate when the objective is to make quick, low-cost,
and relatively routine decisions that do not require innovation or creativity. However, this
form of decision-making is often inappropriate when there is a need to consider broader
objectives such as tradeoffs between competing criteria or constraints, complex or partially
unknown processes, the quality of the decision when there is much at stake, its acceptance by
others for implementation, and other factors.
It is evident that as knowledge-workers become increasingly proficient, they can make
better decisions. What may not always be appreciated is that they can make better decisions
with less information than those with less expertise! That, in turn, makes expert decision
makers valuable: the cost of providing them with detailed information is less and still the
quality and, hence, the value of their decisions is higher than for those with less expertise.
The general relationship between quality of decisions, amount of available information,
and expertise is illustrated schematically in Figure 8-9. The precise relationship can only be
determined for specific types of decisions. In the figure, we see that an advanced beginner is
able to provide “passable” quality decisions if “average” or better information is available.
Thus, the advanced beginner may never provide “good” quality decisions until s/he becomes a
competent performer. As a competent performer, however, s/he can provide “good” quality
decisions if “extensive” or “complete” information is available. As a proficient performer,
s/he can provide “very good” decisions when “extensive” information is available. As an
expert, s/he can provide “good” decisions with less than “average” information is available.
As a master, s/he can provide “passable” decisions with “just a little” information and is able
to provide “good” decisions when only “some” information is available since a master has the
ability to “fill in the gaps” with expectations and in-depth understanding. The grandmaster
(not shown) may be able to provide “excellent” decisions with average information based on
vast experience and broad knowledge.
A more specific overview of some general problem-solving and decision-making
characteristics is presented in Table 8-7 for different levels of proficiency. Not surprisingly,
we find that beginners (beginner and advanced beginner) can participate in problem-solving
under supervision, but should not be asked to make decisions. Further, competent and
 348 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

proficient performers work well with routine tasks and decision challenges and gradually
begin to cope with more difficult, non-standard problems. Only when people become experts
can they be relied on to make good decisions in non-standard situations and be innovative and
creative as a norm.

Figure 8-10. The Quality of Knowledge Work Increases with Level of Expertise and
Amount of Available Information.
Quality of
Decisions

Excellent Excellent
Quality Quality

Very Good Very Good

Good Good

Amount of Passable
Information
Complete Unacceptable
Quality
Extensive

Average

Some

Just a
Little Level
Advanced Competent Proficient Expert Master of
Beginner Performer Performer Expertise
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 349

Table 8-7. Problem-Solving and Decision-Making Characteristics For Different Levels

of Proficiency.
Proficiency Problem-Solving Decision-Making
Beginner • Contributes to limited problem- • Cannot assess situations and make
solving under supervision. decisions
Advanced • Performs selected tasks alone but • Assists in assessing situations; cannot
Beginner needs monitoring decide reliably
Competent • Performs a wide range of (routine) • Assesses some situations, but is
Performer tasks for well-known challenges mostly able to choose decisions by
without supervision elimination only in narrow areas
• Starts to reframe problems
• Performs all routine problem-solving • Assesses and decides competently in
Proficient well some areas, often after considerable
Performer • Works with selected range of non- reflection
standard challenges • Sees few indirect implications.
• Reframes problems in complex Chooses good decisions and is
situations creative in narrow areas
• Solves a wide range of nonroutine • Assesses and decides automatically
Expert problems from large store of reference within area of expertise, creates
cases alternatives, sees some indirect
• Reframes problems extensively where implications
that is considered important • May be vigilant and creative in
several areas
• Is careful to solve the “right” • Assesses and decides many
Master problem; sees many indirect challenges automatically within area
implications; is often vigilant and of expertise
creative • Understands decisions criteria well
• Looks for hidden differences
• Solves the “right” problem; sees • Assesses and decides automatically
Grand many indirect implications within broad, multi-perspective areas
Master • Is typically vigilant and very creative of expertise
• Takes very broad and long-term • Understands when challenges are
perspectives nonroutine
• Balances complex tradeoffs

A slightly different perspective of relations between decision-making implications for

different stages of knowledge development is shown in Table 8-8, which outlines selected
implications and potential actions for improvements.
350 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Table 8-8. Competence at Different Stages of Knowledge Development.

Stages of Knowledge Selected Decision-Making Potential Actions for
Development Implications Improvement
Ignorant or Barely Aware • Decisions are of unacceptable When ignorant, no action may be
Is unaware of what the quality. taken. When Barely Aware, seek
knowledge is or how it may Relevant knowledge is regularly knowledge through informal
pertain to Decision-Making ignored & its applicability is not discussion, reading, through
IGNORANT or BEGINNER understood education, and so on
Knows That Knowledge Exists • Decisions are slow, low quality • Build knowledge: courses,
Is aware of where knowledge • Proper needs, preferences, etc., are apprenticing, on-the-job training,
exists, where to go to gain access used but tentatively & late informal discussions, self-study,
to it & use it for its purpose • Unstructured meetings are held to & reading
ADVANCED BEGINNER assemble knowledge & collect ideas • External surveys of “customer”
needs, preferences, & so on
Knows About the Knowledge • Decisions are slow, but of marginal • Build knowledge through
• Uses & reasons with knowledge or acceptable quality courses, reading, on-the-job
given external knowledge bases • Decision maker may work alone but training, discussions, &
(books, people, expert systems) tends to use standard or simple explorations with peers
COMPETENT PERFORMER approaches & aspects of knowledge
PROFICIENT PERFORMER (KISS - Keep It Simple, Stupid)
Organizes the Knowledge • Decisions are reasonably timely but • Obtain knowledge through
• Becomes closely familiar with of varying quality, depending on the formal channels such as
aspects of knowledge & decision maker’s knowledge of the education & literature
organizes it in mind & memory particular area • Build knowledge through
PROFICIENT PERFORMER personal experience
Spreads the Knowledge • Decisions are acceptably timely & • Build knowledge from formal
• Good familiarity with of acceptable or good quality sources & other people
knowledge & its applicability • Decisions start taking “adjacent” • Use personal experiences as
• Sees business value in making it operations & problems into account knowledge sources
available for use • Becomes a mentor for less-
PROFICIENT PERFORMER, experienced decision makers
EXPERT
Knows the Knowledge • Decisions are quick, of good quality • Builds knowledge from R&D
• Holds knowledge in memory, & may involve other people to obtain programs, personal experiences,
understands where it applies, better information & understanding & from peers
reasons with it as required • Decisions involving expert • Internalizes knowledge by
• Has some automated knowledge knowledge are explicit to include internal examination to verify
& forms judgments judgments & perspectives validity
EXPERT
Fully Internalizes the • Decisions are rapid, of excellent • Explore what is known & find
Knowledge quality, & made by one person who knowledge gaps
• Fully integrates knowledge & involves others only to obtain best • Build knowledge to fill gaps
values, judgments, concepts information • Work INTELLIGENTLY
• Automates selected knowledge • All simple knowledge aspects are • Show wisdom
& consequences automated -- including judgments &
MASTER, GRAND MASTER second-order effects
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 351

Give People Better Knowledge and They Will Solve Problems and Make Decisions Beyond
Traditional Bounds!

Most people are bright and intelligent and many tend to have ideas and insights that go far
beyond the capabilities we expect given their general proficiency. One important knowledge-
related issue, then, is to prepare knowledge-workers to obtain relevant knowledge so they can
achieve greater proficiency in problem-solving and decision-making without having to go
through the traditional time-consuming expertise development processes.
Many approaches are available to achieve these goals. Knowledge-workers can be
provided with the needed knowledge without “owning it.” They may be provided with
knowledge-based decision-support systems, expert networks that give them regular access to
expertise, or they can be assigned to work on collaborating teams where many individuals
with narrow expertise complement each other to form a broader capability. When the
challenging situations can be characterized, it is often desirable to identify specific knowledge
areas that will advance the workers’ proficiency to such an extent that they are able to
perform more difficult tasks. This often is the case when organizational flattening or specific
task delegation result in knowledge-workers having to take on new, but known
responsibilities.

Perspectives on Some Decision-Making Practices and

Issues
A CONTRARIAN VIEW OF IMPORTANCE OF DECISIONS

There is mounting evidence that the particular choice made in many decision situations is
almost insignificant. It may not be important to the success of the operation if Paul or Annie
are hired. It may be rather unimportant if the generator is taken down for routine maintenance
next week or in two weeks. It may be irrelevant if the location of the new gas station will be
on the North or South corner of the intersection. In all such situations, it is important that a
decision be made to “get the show on the road!” The significant aspect is to take action to
start things moving and prevent excessive deliberation that only will delay progress, often at
increased costs.
Situations where it is irrelevant which alternative is selected are those where alternatives
are known to have quite similar expectations -- either because they are well researched, or
because the situation is, and will remain, relatively unknown. In both cases, the variances of
expected outcomes may have large overlaps (they fall within the band of uncertainty) and it
may be better to make a decision to reap the benefits that are expected from either alternative.
352 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

THE PROS AND CONS OF “KISS”

In may quarters, the “Keep It Simple, Stupid” (KISS) syndrome is touted as an important
and necessary approach to framing issues and challenges. This notion can be either highly
valuable or quite detrimental, depending on how it is applied and the situation in question.
First, it clearly is important to identify underlying principles, the root-causes, and to state
them as clearly and succinctly as possible. Finding the root-causes may only be possible after
considerable analysis. Further, explaining them and their influence may require use of
chunking and aggregated concepts understood by those involved.
Second, it is necessary to suppress all information and perspectives that are not relevant to
the issue or challenge at hand. This also may require considerable analysis and knowledge.
Third, judgment and analysis must be applied to determine which factors are important and to
present only those that truly can be expected to influence the situation.
Simplifying issues and challenges in this manner, allows us to be precise and economic in
our treatment without losing anything of importance. But, in accordance with the previously
cited Occam’s Razor-related statement by Albert Einstein: “Everything should be made as
simple as possible, but not simpler!”, there are limits to how much one should simplify.
Most challenges are far from simple and cannot be pared down to one or two dominant
factors. This has become particularly evident with the emergence of international
competition, integrated operations, and more complicated operating environments, ranging
from financial services to operating modern manufacturing machinery.
Unfortunately, the KISS syndrome is often interpreted to mean: “Don’t burden me with
complications that require more mental effort to understand and analyze than I am willing
to exert!” As a result, complex challenges are commonly handled with approaches that are
much too simplistic. When employed in this manner, the KISS syndrome impedes good
decision-making and places organizations at risk as unfortunately has been the case for many
not-so-proactive organizations. To be intelligent-acting, it is very important that
organizations not fall prey to undue simplification.

DECISIONS MUST BE IMPLEMENTED TO HAVE VALUE!

As pointed out in the beginning of this chapter, “All the knowledge in this world is no
good if it is not used.” The same applies to creative and high-quality decisions. Unless
decisions are implemented -- and implemented effectively so all intended benefits are
realized -- the knowledge that has been used to generate them has little or no value.
Making decisions and implementing them effectively requires understanding and expertise
over and beyond analyzing the challenge, reframing it, and creating innovative approaches to
deal with it. Implementing decisions is hard, detailed, often long-term practical work and
may be very different from the more theoretical and “esoteric” planning-type work that
precedes these activities. Implementing decisions takes great and patient proficiency!
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 353

The Hidden Costs of Making Decisions on the Wrong

Level
It is not always clear where particular decision-makings should be made within the
organization. It is not clear who should make them, what they need to know, which
information must be available, and how timely the decision must be to be of best value. One
must consider where the relevant expertise lies and where the best and most correct
information about the decision situation is. When the decision situation is encountered far
down in the organization, there is more accurate and often more detailed information
available at the point of contact. Particularly for smaller decisions, there may also be better
and more relevant knowledge about how to make the decision at that point. For many
situations, and particularly for larger, more important decision situations, there may be better
and more complete knowledge at higher organizational levels. The questions then are:
“Where should the various decisions be made?” and “Which criteria should be used to
decide?”
The value of making any type of repeated decision well -- i.e. its risk-adjusted value --
varies significantly with where it is made in the organization. One relevant criterion,
therefore, is to minimize overall cost of making decisions, assuming that the value is inversely
related to costs. The general relations between costs and who make medium-sized decisions
are illustrated in Figure 8-11. For each decision type, the tradeoffs will be different and there
are five elements to these costs:
354 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Figure 8-11. General Relations Between Level in the Organization and the Five Cost
Elements for Medium-Sized Decisions.

Cost of
Imperfect
Knowledge

Cost of
Imperfect
Information

Cost of
Making
Information
Available

Cost of
Delay

Cost of
Tying
Up
Managers

President Executive Senior Customer Central Field Field

CEO Vice Vice Service Customer Management Staff
President President Manager Service Staff

• Cost of imperfect knowledge -- Better expertise will increase the quality and value of the
decision.
• Cost of imperfect information -- Better (more detailed and accurate) information will
increase the quality and value of the decision.
• Cost of making the necessary information available to the decision maker -- If decision is
made at the point of contact, there may be little or no cost for
Solve Problems! Make Decisions! -- Use Knowledge Creatively! 355

Figure 8-12. Total Costs of Making Decisions for Small Routine, Medium-Sized, and
Large, Very Important Decisions.

Total
Cost Relative Cost of Shifting
Relative Cost of
of Routine Decision
Routine Shifting Routine towards the Field
Decision towards
Decision
Management

President Executive Senior Customer Central Field Field

CEO Vice Vice Service Customer Management Staff
President President Manager Service Staff

Total
Cost
of
Relative Cost of
Medium Shifting Decision
Relative Cost of
Sized towards the Field
Shifting Decision
Decision
towards Management

President Executive Senior Customer Central Field Field

CEO Vice Vice Service Customer Management Staff
President President Manager Service Staff

Total
Cost
of
Very Relative Cost of
Important Shifting Important Relative Cost of
Decision Decision towards
Shifting Important
Management
Decision towards
the Field

President Executive Senior Customer Central Field Field

CEO Vice Vice Service Customer Management Staff
President President Manager Service Staff

bringing information to the decision maker. If decision is made far removed from the
point of contact the cost of organizing and communicating the information may be great.
• Cost of delay -- Most decisions have time value. The faster the decision is made, the more
valuable it is.
• Cost of tying up higher level managers and executives -- Executives’ time is a resource
356 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

with high opportunity cost in all normal organizations. It is therefore, very costly to tie up
executives to perform tasks that could be delegated.
The total costs for small, routine decisions, medium-sized, and large, very important
decisions are indicated in Figure 8-12. In this figure, which only provides general indications
of the costs, it is shown that for any decision type, there is an optimum location in the
organization where that decision should be made.
The optimal location, moreover, is as much a function of the knowledge that is available
to the decision makers as any other factors and can therefore, be influenced by education or
knowledge pooling (such as expert networks or even knowledge-based systems). It is rather
important that these tradeoffs be understood and taken into account whenever one considers
educating decision makers or delegating decisions -- or moving them upwards.
 357

How Knowledge is
USED in Practice

Chapter 9
Team Work, Collaboration, and Related
Knowledge Needs

This Chapter
We frequently use knowledge when we work in teams -- when we attack challenges
jointly with others. Within organizations, much of our work occurs when we network with
others in more or less formal teams. Teams and networking are some of the basic reasons for
organizing people in groups and provide the essential structure for intelligent-acting behavior.
Networking between people is performed in different ways, for different purposes, and
with different results. Nine kinds of networking are presented in this chapter to indicate the
range of current practices. Moreover, an example of “task-focused networking” is provided to
illustrate one of the most common work practices today. This example also presents how
required knowledge may be brought together in the team.
Whenever people network, they will team -- more or less effectively. We discuss nine
teaming approaches that range from “ad hoc coworker teaming” (corresponding to task-
focused networking) to “committees” and present some of the knowledge requirements
commonly encountered in teams. It is rare that requisite knowledge for delivering quality
work is a criterion for assembling teams. A simple approach to determining required
knowledge is provided to help composing effective teams.
A special kind of teaming occurs when several people join forces to collaborate.
Collaboration is a highly powerful way of teaming, and requires considerable knowledge to
be successful. In addition, eight conditions must be satisfied for people to collaborate without
crippling restrictions.
The most effective, productive, and creative team is the self-managed team. Its special
knowledge requirements -- in addition to collaborative requirements -- are discussed outlining
factors that make teams outstanding. This discussion includes a listing of the elements of
team driving forces: “vision, passion, and capability to carry it out.” A brief discussion is also
provided of why a team is more than the sum of its component parts.
358 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Organizations Are Built On Networking

As stated in earlier chapters, knowledge has no value unless used. Without appropriate
knowledge, reasoning, problem-solving, and decision-making -- knowledge work in general --
will be arbitrary and haphazard. Many of the situations we encounter are of a nature that are
beyond our limited capabilities and lead us to join forces with others -- coworkers, associates,
or anyone who can help.
Organizations -- even small ones -- perform very complex tasks and operations and
although some are simple “make-work” tasks, the majority are inherently complex. For
example, it is very complex to design, manufacture, deliver, and service even a relatively
simple product such as an inexpensive, yet effective, reliable, and safe toaster. It is much
more complex to make cars.
The effectiveness of the organization -- the degree to which it can act intelligently -- is
directly a function of how well people network to deal with the complexity they face.
Without networking, people operate in isolation relying on their own limited knowledge and
perspectives, and work suffers tremendously if it can be done at all. What may not always be
appreciated is how much, and what kind of knowledge is required to network effectively.
The basic reason for assembling people in an organization is to let them work together --
to facilitate interactive networking and, if possible, team to perform collaborative work.
Organizations operate and prosper through people interactions. People interact and work
together to get things done by analyzing challenges, resolving issues, solving problems,
making decisions, and implementing changes. In the organization, work itself is organized as
a network of interlinked actions between people -- particularly through interactions between
knowledgeable people whose expertise is pertinent to the challenges that are faced. Only in
simple single-person enterprises do we sometimes find individuals working in solitude
without networking with associates to generate their deliverables. In these cases, unless they
deliver a one-person service such as physiotherapy or make artful ceramics, on closer
examination it will be found that they network with their customers and with other
organizations.1

Networking Takes Many Shapes

Networking takes many forms and occurs at many levels. For example, it can be shallow
as when only information is forwarded to those parties who will be affected in order to
coordinate activities. It can be more extensive when people exchange information and work
to adjust their activities to cooperate. It can be more comprehensive when knowledge-workers
access expert networks to obtain assistance with difficult challenges. Finally, it can be very
comprehensive and effective as when a complementary team of knowledge-workers
collaborates to work on specific tasks by pooling their knowledge and creating together.

1 Many of these perspectives reflect the views expressed by Terry Winograd (1988).
Team Work, Collaboration, and Related Knowledge Needs 359

In the not-so-distant past, only directly work-related networking was considered

appropriate, except for apprenticing and other learning situations. That narrow view is now
only supported by a small number of managers, and often in organizations that are not doing
well. Modern management theory encourages the use of networking that serves to make
better use of the organization’s knowledge resources and to establish working relations
between people. Examples of some different networking modes that we commonly observe
are:
DIRECTLY WORK-RELATED NETWORKING
• Task-Focused Networking takes place among coworkers who seek assistance from
known sources to perform specific tasks that need to be completed. Examples are:
Consult with others to resolve issues; Make decisions; Develop priorities; Collaborate
on designs; Consult on staffing; Schedule meetings.
• Idea-Generation Networking occurs when people “walk around” to associates to: “Float
ideas;” Explore how to handle real or hypothetical situations; Present potential situations;
Discuss pros and cons.
• Help-Seeking Networking happens when a person contacts associates to explore if they
can contribute means (knowledge, information, ideas, resources, authority, and so on) to
assist with a challenge.
• Consensus-Building Networking frequently takes place when individuals discuss
potential actions with others to see what their reactions are and to influence them to
support the proposed actions.
• “Company Core” Networking refers to a concerted move by top management to network
the organization’s top performers and leaders. Participants may be selected from different
levels, locations, and business units based on their knowledge, personal characteristics,
span of control, and critical information flow exposure. Company core network members
become “the Company within the Company,” may number from 25 to over 100, and
communicate and meet regularly.1
• Formal “Expert Networks” (discussed in the next section).
KNOWLEDGE-BUILDING NETWORKING
• Apprenticing Networking occurs when less experienced workers are teamed with experts
to learn from them.
• Experience-Sharing Networking takes place when knowledge-workers share “lessons-
learned” or swap “war stories” on how they have handled specific challenges and difficult
situations, how they were able to take advantage of an opportunity, what went wrong in a
particular case, or otherwise share episodic experiences and insights -- often very
informally.
RELATIONS-ESTABLISHING NETWORKING
• Acquainting Networking happens when individuals meet (perhaps for the first time) and
explore “who the other persons are,” what they know, and how they potentially can help
or become useful in the future.
• Social Networking happens when people meet to enjoy each others’ company and to

1 This important network type is described by Ram Charan (1991).

360 Knowledge Management Foundations:
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expand their knowledge of each other.

In all these networking modes, important knowledge flows take place. For example, in
directly work-related networking, knowledge flows both to work objects as the knowledge is
applied to perform work and to the knowledge-workers since they learn whenever they work
with material they do not know well. Even in well-known situations, people often innovate
and learn when given the opportunity. Similarly, in knowledge building networking,
knowledge flows to the knowledge-worker -- or to inanimate knowledge repositories such as
documents or knowledge bases in knowledge-based systems.

It Takes Networking to Handle Customer Requests

Chet Hawkins, PotCo’s customer service specialist, receives a request from John
Alexander, PamliCo’s chief engineer, for assistance with an application problem that
PamliCo experiences when using one of PotCo’s products. The application problem is
complicated and unusual and is beyond Chet’s experience. Chet realizes that solving the
problem is important. Finding a working solution is worth a lot to PamliCo, who is a
large customer for PotCo’s products.
Chet decides that he will need considerable help to assist John Alexander. Most likely, he
thinks, he and someone else will need to go to the customer site for several days to
diagnose and solve the problem. From previous experiences, he judges that solving the
problem will require either a new way of applying the product or, if that does not work, a
slightly different product will have to be formulated.
Chet calls Pete Holden, his manager, to alert him to the situation and to obtain his
authorization to provide the assistance he thinks is needed. He also gets hold of Jennie
Hall, the technology expert, and Ollie Thorpe, the product developer, to ask their opinion
on what might be the matter and how they ought to proceed. In spite of being very
experienced, Jennie and Ollie have not heard of this kind of problem before, but they
check with Pete. He thinks he has seen something similar at another customer who has
similar applications with which he is familiar.
Pete and Chet decide that they will go to the customer site and take Jennie with them even
though she does not know applications as well as Ollie and is not an expert in new
product development. She does, however, have a better understanding than Ollie of the
product’s scientific basis and might, therefore, be of greater assistance in this situation.
Many everyday situations are similar to this example. Nonroutine problems often exceed
the expertise and experience of the persons who “own” them. To explore how these problems
should be handled, the problem owners network with others who they think have
complementary expertise or who have the decision rights to authorize extended efforts that
may be required to handle the challenges correctly.
A schematic illustration of the networking that took place at PotCo is provided in Figure
9-1, which also shows the roles of each network participant. The initial networking was
between the owner of the problem (Chet) and his
Team Work, Collaboration, and Related Knowledge Needs 361

Figure 9-1. An Example of Networking to Handle a Customer Request.

Formulates Request
Customer for Assistance

Company Receives & Analyzes

Request

Determines Required
Internal Assistance

Technology Expert Product Developer

Provides Assistance Provides Assistance

Product Developer
Technology Expert
Customer Specialist
Integrates Answers

Cust. Specialist & Mgr Customer Specialist

Customer Specialist
Manager
Decide on Assistance Identifies What to Do

Customer Specialist
Company Prepares Response

Customer Customer Receives

Assistance

informal expert network. Only when Chet determined that he needed additional help did he
seek out the manager.
From a knowledge perspective, it is important to identify what each party brings to the
team and what they can contribute. In Figure 9-1, the knowledge profiles for each person are
indicated. These profiles are enlarged in Figure 9-2, which also shows the desired knowledge
profile for a competent customer service team (shaded area bounded by heavy lines). In this
case, each of the four team participants have more than the desired knowledge in some of the
important areas, and together they complement each other to form a highly competent team
that exceeds the requirements in most areas.
In one area, “know others on the team,” the team is deficient. The customer specialist and
the manager have good (“proficient”) knowledge of the others on the team, but the product
developer and the technology expert do not. As we discuss later in this chapter, for a variety
of team-performance reasons, it is important to have good shared knowledge of one’s fellow
team members.
362 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Figure 9-2. Customer Service Team’s Knowledge Profile.

Product Developer Product Customer Specialist

Application
How Product Diagnostic
Is Made Methods

Technology Expert

Product
B A C P E M G Customer's
Theory Application

Manager Desired
Knowledge Profile

Know Others Customer

on Team Importance
Assistance
Policies
B - Beginner; A - Advanced Beginner ; C - Competent Performer; P - Proficient Performer;
E - Expert; M - Master; G - Grand Master

Team Work and Collaboration

TEAM WORK

A highly effective form of networking occurs when two or more people form a team to
work together on a task. It has been argued that “teams and good performance are
inseparable. You cannot have one without the other.”1 There are many forms of team work
and, correspondingly, teams vary greatly in effectiveness. There are also many reasons for
teaming. Apart from the obvious reason of adding “more hands to do the work,” a major
reason is to bring together complementary and different knowledge as in the above example.
In such cases, it is very important that the areas of knowledge that are particularly needed are
made explicit to avoid overlooking important expertise. Thus, it must be ascertained that the

1 Katzenbach & Smith (1993).

Team Work, Collaboration, and Related Knowledge Needs 363

team members among them have all the required knowledge or that it is accessible from other
sources.
When a group of individuals work together, they generally provide individual work
products that together add up to the aggregated team deliverables, the “collective work-
products.” Seen this way, it becomes clear that for the total deliverable to be of high-quality,
the individual work products need not only be of high-quality, they must also fit together to
create an integrated whole without voids and omissions.
If we look at teams from the perspective that their function is to bring requisite knowledge
together effectively, we may find alternate approaches to teaming. For example, teaming can
be considered an approach of pooling knowledge to make it available to perform knowledge-
intensive activities. Common approaches include:
CONVENTIONAL TEAMING APPROACHES
• Ad Hoc Coworker Teaming -- Initiated by an owner of a particular problem, coworkers
network to form a short-term alliance to address the challenge. It is the most common and
most important approach to teaming and is the basis for most organizational networking.
(Illustrated by the PotCo example.)
• Permanent, Full-Time Work Teams -- Organizational entities under single management
assembled to perform more or less well-defined tasks that range from posting accounts
payable transactions, design braking systems for automobiles or market vacuum cleaners,
to determining corporate strategy. Organizations are traditionally structured into
departments, sections, or other entities that each may form such work teams.
Regularly, full-time work teams are deliberately and explicitly composed to include a
complement of expertise that addresses known, but often traditional approaches to
performing the work involved. However, they may have limited ability to address
challenges that require new or different insights and under such circumstances often
become defensive and parochial.
• Taskforces -- Special part- or full-time teams assembled to address a specific challenge;
may be dissolved when its mission is completed. Taskforces are often assembled using
expertise profiles that ascertain quality deliverables. They may also often be composed of
representatives from different stakeholder groups with little regard for the expertise
required. Taskforces typically engage in Systematic Problem-Solving.
• Project Teams -- Special teams to implement larger projects, often with considerable
duration. Project teams are typically assembled to ascertain that they possess the requisite
expertise. At times, project teams are organized by discipline with minimal collaboration
between departments.
• Committees -- Groups assembled to address challenges that often are considered to be
complex and may affect several constituencies. Committees are normally composed by
selecting representatives from affected constituencies to secure their interests, and not by
considering which expertise areas are required to tackle the challenge before the
committee.
OTHER TEAMING APPROACHES
• Self-Managed Teams -- Teams of people, often with a range of expertise areas and a
good blend of proficiencies, and with one or several members capable of leading the
364 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

team’s work (see section below).

Self-managed teams are perhaps the approach that produces the highest quality work
products when they possess the appropriate complement of knowledge and proper team
spirit and leadership.
• Formal “Expert Networks” -- Pre-arranged access to designated contact persons
determined a priori as those who will assist with challenges of different kinds. Assistance
for help with a challenge is initiated by workers who access the network (contact the
designated expert), and knowledge is provided by the expert in response.
• Knowledge-Based Systems (KBS)-- An extreme concept of teaming where knowledge
workers whose expertise is embedded in the computer-based KBS become “virtual” team
members who cannot be contacted directly and whose participation is time-shifted.
Factors other than required knowledge may be highly important in team member
selections. For example, as discussed by Davenport et alia (1992), organizational political
considerations are almost always of significant importance and needs to be taken into account.
It is also very important that the team members’ personalities are compatible and that there is
sufficient leadership among them.

Inter-Team Communication Modes Affect Knowledge Sharing!

Communication modes between team members can vary extensively. Different

communication modes considerably affect effectiveness of members’ contributions to
knowledge-intensive tasks -- in terms of timeliness, the extent to which challenges and other
shared topics can be clearly understood by all team members, and the communication of
knowledge itself. Examples of some important modes include:
• In real time
-- Face-to-face
-- Over telephone
-- Using groupware on networked computers
• Asynchronously -- Time Shifted
-- Through challenge-specific documents (project documentation, external, and internal
mail)
-- Over E-mail
-- Through intermediaries
-- Through conventional documented repositories (manuals and handbooks)
-- Through computer-based knowledge repositories
Of these communication modes, the real-time face-to-face communication proves to be
the most effective -- and often also the most expensive. Primarily, it provides quick progress
and allows clearing up misunderstandings, exploring particular aspects of interest, and creates
generate-and-test dialogs and many related knowledge-exchange, knowledge-building, and
problem-solving activities. The other communication modes are often used and may well be
more effective, although slower in many situations.
Team Work, Collaboration, and Related Knowledge Needs 365

Teams Must Possess a Full Complement of Knowledge to Provide Quality!

Unless a full complement of the knowledge needed is available to the team -- from its
regular members or from other sources -- there is no guarantee that the team will act
intelligently and that the work delivered will be of acceptable quality. It is a generally held
belief that the major reason for low-quality work of any kind is caused by team compositions
that suffer from knowledge deficiencies. For quality work to be possible, the team must be
assembled and staffed to ascertain that the appropriate complement of required knowledge is
available.
Few organizations regularly assess explicitly the knowledge required within their teams to
achieve quality results. Indeed, not even Total Quality Management approaches focus on this
issue. Thus, when surveying management professionals it is rare to encounter anyone who
systematically attempts to ascertain that the appropriate knowledge and expertise are available
to produce quality results. Since the underlying ingredient of quality and success is the
knowledge that is made available to be applied, it is surprising that it is not explicitly
considered more often.

A Simple Approach to Determine Knowledge Requirements for Teams

A simple approach to determine which knowledge is required by a team to produce

quality work with seven basic steps are indicated in Figure 9-3. It is necessary to start the
process by identifying which work will be performed -- its nature and expected deliverables.
The second step, determining how quality of the work best can be characterized, typically
requires deeper reflections and is frequently not considered. Since the objective invariably is
to generate quality deliverables, this step is a vital link to determining the required knowledge
areas and the proficiencies needed within each .
Often other requirements beyond delivered quality govern team compositions, at least in
part. For example, there may be regulatory and institutional requirements. We may find that
stakeholders need to be represented on the team for affiliatory reasons or that there are self-
serving (and perhaps inappropriate) reasons for including team members. By explicating the
expertise required to create quality deliverables, it is much easier to deal with irrational and
extraneous requirements.

You Need Knowledge to Collaborate!

CONDITIONS FOR COLLABORATION
The most effective and desirable form of team work is collaboration. While theoretically,
it is always possible to collaborate rather than only cooperate or just coordinate, practically
speaking, it is not always possible for a number of reasons. Most of these reasons might be
considered inappropriate such as egocentric self-serving reasons like: “I want to take all the
366 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

credit for this work myself!” or “I don’t like John and I don’t want to work with him!”1 Other
reasons may be affiliative in nature such as: “I need to work with engineering and accounting
on this project -- and they cannot spare people to work directly with me, but they will
cooperate and ask that I coordinate with them to keep them informed.”

Figure 9-3. Simple Approach to Determine Required Team Knowledge.

Identify the nature of challenge and

expected deliverables from the ?
planned team work

Determine what constitutes

high QUALITY in the
planned work and deliverables

Specify which KNOWLEDGE areas,

disciplines, and methodologies are
needed to ensure quality

Identify corresponding levels of

PROFICIENCY required for each
knowledge area and discipline

Explore
Regulatory, Institutional,
OTHER REQUIREMENTS
Situational, Affiliatory Factors
for team composition

Identify potential TEAM

MEMBERS and determine their
proficiencies in required areas

SELECT (appoint) team members

to obtain desired team composition
with required expertise

Collaboration by Equals
Paul Jones and Mary Stewart work together to operate the alkylation unit at Star’s oil
refinery. They are equal partners but have different backgrounds. Mary is a chemical
engineer three years out of school and Paul has been an operator since he graduated from
1Self-serving and affiliative factors were discussed in the previous chapter in the Section on
Factors that Affect Decision Making Negatively.
Team Work, Collaboration, and Related Knowledge Needs 367

high school 20 years ago.

It is noon on Friday and the plant has been operating relatively well all morning. At
about 12:30 the process starts to show signs of becoming slightly perturbed but it is not
clear what might cause the problems. Paul thinks it may be due to contamination in one
of the feeds although the symptoms are somewhat different from what he has seen many
times before. Mary listens to Paul’s explanations but is slightly cautious since they do not
make sense based on what she knows about reaction kinetics. She does not know the
typical operation of the plant as well as Paul, however, and does not press her views.
The plant reacts slowly and Paul and Mary have a few hours to figure out what the
problem is and how to deal with it before the situation becomes urgent. They listen to
each other and try to incorporate the other’s observations into their own thinking to
explore how they may proceed. They send a sample of the suspect feed for analysis but
will not get the results for three hours. After a short while, they agree to increase the
catalyst recycle rate as a prudent approach to dealing with the problem. That might help
the contamination issue, if that is the cause. It might also alleviate some problems that
Mary suspects and will prevent flooding in some vessels that now have rather high liquid
levels. Finally, it will give them additional time to try to find the root cause of the upset.
Paul and Mary work closely together. They look at instruments, decide which computer
settings to implement, and continue to try to generate the best ideas they can come up
with.
When two people collaborate on operating a complex chemical process, they engage in a
sophisticated interpersonal process. They may independently inspect the behavior and
performance of the different parts of the plant as time goes by. They will discuss what
appears to happen, which behavior may be expected next, what causes the present operation
(particularly if it is unusual), what the advantages or disadvantages may be to make certain
changes in operation, and so on. They bring their respective experiences and perspectives
naturally into their discussions and actions without reflecting much about their own thinking
processes or the strategies they use to solve problems. They will try to make the best use of
their knowledge. When one of them presents an idea, the other will use the best
understanding of the other’s suggestion while also using her/his own knowledge to build upon
-- or refute -- it. The resulting operating performance of the plant will manifest the ideas and
perspectives of the two operators and will most likely be much better than if either person had
operated the plant alone.
For a creative and effective work relationship to happen, the persons who work together
need to truly collaborate. This requires that several conditions are satisfied. To succeed,
collaborators must:
1. Complement each other so that their combined knowledge and proficiency includes all
the expertise required to deal with the challenges they will encounter.
2. Have sufficiently different perspectives and experiences so that together they can provide
valid contributions with enough diversity to tackle challenges that they may not have
encountered previously.
3. Understand enough about the other’s areas of expertise and proficiencies to judge when
and where each might -- or must -- contribute.
368 Knowledge Management Foundations:
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4. Share enough knowledge so they can understand the ideas and suggestions that the other
person(s) present.
5. Share common goals for what they will achieve as a result of their collaboration.
6. Be willing, and permitted, to work closely together -- it helps if they like each other.
7. Have workstyles that are compatible and reasonably interactive.
8. Be secure enough in their positions to know that their future will not be adversely
affected if they choose another person’s ideas and suggestions over their own.
These eight conditions constitute the basic principles for successful collaborative work. They
require considerable knowledge that also, to a large extent, lends itself to be made explicit.
To be effective, collaborators must go beyond coordinating their own activities with the
activities of others. They must ascertain that theirs and others’ activities not merely
“dovetail” or are only organized to prevent them from working against each other. Instead,
they must work together on tasks to be performed so that the results become creative and
innovative and provide better solutions than if the participants performed the tasks alone.
The longer-term aspects of collaboration are very important. Most knowledge-workers
must be reliable and obtain deep insight into their work to an extent that is only possible if
they stay with their jobs for longer periods. Only through on-the-job experience will they be
able to transform general understanding into the pragmatic and automatic performance
knowledge that is required to perform quality work, quickly, effectively, and effortlessly. In
this manner, they increase their expertise, learn, and build knowledge from experience,
thereby becoming valuable employees. For that to happen, however, the persons must remain
with their jobs. This, in turn, requires that they find it desirable to continue collaboration.
Factors that influence this positively include that members must:
• Receive personal satisfaction, “pride in workmanship,” and personal reinforcement from
the work.
• Have the sense that their work is valued by the organization and their peers.
• Understand how their future is affected if they pursue the collaborative work.
• Be encouraged by their organization to perform the work as part of their duties.

Collaboration by Complementing Professionals

Several professionals with special and complementary expertise may work together on a
collaborating team. In this case, their relations and functions differ from the “collaboration by
equals” discussed above. From methodological and intellectual perspectives, a major aspect
of collaboration is joint creative work on tasks to provide highly insightful analysis and to
conceive imaginative and useful solutions and approaches. When professionals with different
areas of expertise collaborate, they may share responsibilities for a few tasks, but typically
they lead those tasks that fall within their expertise area. They may rely on other professional
collaborators in situations such as the following:
• For tasks that are “adjacent” to their own and closer to another team member’s expertise.
For example, the primary professional will take the lead and work with, and look to,
adjacent professionals for ideas and additional perspectives, opportunities, and objectives.
Team Work, Collaboration, and Related Knowledge Needs 369

Together team members may identify the best achievable approach. Although for some
aspects of this task the primary professional or others will work alone, as a team, they will
continue to collaborate. For example, when the task is to determine suitable concept
formation training for a language disabled child, the primary professional may be the
school psychologist while the special educator and classroom teacher are professionals
with adjacent expertise.
For collaboration between the primary and adjacent professional to be effective, all
parties must share a fair understanding of the task itself, the overall situation that the task
is a part of, and of each other. Without this shared knowledge, their communication will
be ineffective and the collaboration will not succeed.
• For tasks that are isolated, the primary professional may perform the full task alone and
only share its results and verify that they are in accordance with the whole effort.
• For tasks that are common to several of the expertise areas represented on the team, these
may be approached in smaller groups (each group similar to collaboration by equals).
The eight principles for successful collaboration discussed above also apply for this case.
When managers responsible for different areas work collaboratively, their relations and
functions are similar to the way professionals complement each other. There are differences,
however, since the managers are responsible for tasks within their own organizations that they
cannot relinquish. They need to consult with one another and particularly with those in the
adjacent operations. The organization’s reward system must be designed to promote such
behavior. If it does not, walls (and “silos”) will be built, empire building will predominate,
and unproductive politicking will result.

COLLABORATION IN BUSINESS AND INDUSTRY

Collaboration has long been a highly productive work style in research and development
(R&D) where producing novel and competitive results requires that multi-disciplinary
insights are coupled with innovation. Thus, collaborating R&D teams provide approaches
that allow coworkers to create together in security while sharing perspectives and approaches.
In these environments, teams tend to enjoy high levels of autonomy, demonstrate high degrees
of professionalism, and engage in participative management. Frequently, the organization’s
culture and reward systems also tend to reinforce this work mode.
Collaboration has been the dominant work style in consulting since that industry started at
the turn of the century. In business, organizational, and technical consulting, the focus is to
develop the best and most practical solution for the client to facilitate implementation. Such
solutions often require the knowledge of a number of experts who all must contribute relevant
aspects to the problem-solving process. These experts collaborate as a team and are
responsible for the quality and implications of their decisions and actions. To work
effectively together, they must understand enough about the other team members’ knowledge
and expertise to determine how their joint knowledge and solutions constitutes the most
efficacious approach for their client to follow.
Collaborative team work is a central part and the dominant work style of Total Quality
Management (TQM), which is accepted by many as the most effective management method
370 Knowledge Management Foundations:
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and work organization. In TQM, collaboration is expected to take place on all levels --
between peers and between workers and managers. As in consulting, other industries now
recognize that narrow, single-perspective, or intra-discipline solutions typically provide
insufficient results. Whereas coping behaviors that lead to short-term management, control,
and decision-making may appear to make narrow and traditional solutions desirable, their
simplicity may be deceptive and frequently counterproductive in the long run. The
comprehensive solutions that are required in today’s operations -- in industry, healthcare,
education, and most other facets of life -- cannot be generated by single individuals; nor can
the resulting systems be operated by people working in isolation. The necessary services and
products can only be achieved through collaborative team work.

The Self-Managed Team

A highly effective way to obtain quality work results through teaming is found in self-
managed teams. Such teams have a great deal of autonomy and authority, are strongly
outcome-oriented and goal seeking, and do not require external supervision. They manage
and execute their own work according to negotiated and established objectives. Their work
mode is normally collaborative and instead of having only one manager, the leadership
position may shift between several senior people according to their specialties and the tasks at
hand.
To be valuable, the self-managed team must be intelligent-acting. Specifically, it must
be flexible so it can deal with external disturbances and deviations from plan -- the “noise”
that always occurs in the workplace. In addition, the self-managed team must also be
versatile so it can deal with difficult challenges and conditions that go beyond routine,
demanding competent, and often creative, handling.
We often expect taskforces as well as teams in the health, legal, technical, and educational
professions to be self-managed. But if we do not pay attention to, and ascertain that, the
pooled knowledge and skills within these teams fulfill the requirement to perform quality
work, they may fall short of expectations. Again, the requirements for success include the
eight conditions for collaboration listed earlier.
To be highly effective, the self-managed team must possess extensive knowledge. The
team members must have the knowledge required to collaborate as indicated above. In
addition, at least the experienced team members must have extensive goal-setting or idealistic
knowledge. From a general perspective, these teams perform six basic activities that all pose
quite different knowledge requirements. The activities that a team that works together on
projects are:
1. Identify the challenge -- What is it, and how can it be characterized?
2. Identify how well the challenge can be met -- How good an outcome might be achieved?
3. Specify and delineate the work program required to deal with the challenge -- Which
Team Work, Collaboration, and Related Knowledge Needs 371

approaches and methodologies shall we use?

4. Execute the work program -- deal with the challenge to produce the best outcome.
5. Manage, maintain, and improve the work environment -- Where is our work environment
in need of attention?
6. Learn -- synthesize knowledge obtained from having dealt with the challenge.
The regions of the general knowledge requirements for these activities are illustrated in
Figure 9-4 in terms of the four conceptual knowledge levels and the nature of knowledge as
routines, scripts, and schemas.
The objectives for employing self-managed teams are to produce quality work with a
minimum of effort and negative side-effects. In addition to the detailed understanding that
pertains directly to performing their work, these teams are expected to have knowledge of
their role within the organization and how that role fits within the organization’s broader
goals. They also need to internalize this knowledge so that they can use it at a moment’s
notice to guide all the minute “running” decisions that are integral to their detailed work.

Figure 9-4. General Knowledge Requirements for Self-Managed Teams.

GOAL-SETTING 2. Identify
(IDEALISTIC) How Well
Knowledge Challenge
Can Be Met

1. Identify What
the Challenge Is
SYSTEMATIC
Knowledge
3. Specify Work
Program

6. Learn From
PRAGMATIC Challenge
Knowledge
5.Manage the
Work
Environment

AUTOMATIC
Knowledge
4. Execute
Work Program
-- Deal with
Understanding Understanding Understanding Challenge
in the form of in the form of in the form of
ROUTINES SCRIPTS SCHEMAS
372 Knowledge Management Foundations:
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What Makes a Team Outstanding?

A number of factors need to be in balance for a team to become outstanding. In addition
to the requisite knowledge, Katzenbach and Smith suggested that the following factors play a
major role -- that is, the team must:
• Share leadership roles
• Exhibit individual and mutual accountability
• Have specific team purpose that the team itself delivers
• Create collective work products
• Encourage open-ended discussion and active problem-solving meetings
• Measure performance directly by assessing collective work products
• Discuss, decide, and execute real work together -- i.e. collaborate!
These characteristics can all be enhanced by better knowledge. Therefore, team building
and knowledge building are closely associated and close attention must be paid to identifying
any additional knowledge that is required in the team to make it highly effective. Another
influential factor is the team’s driving force, which also is influenced by the knowledge within
the team. It relates closely to the “team purpose” suggested by Katzenbach and Smith and
deserves additional comments.1

KNOWLEDGE PROMOTES THE TEAM’S DRIVING FORCE: ITS VISION,

PASSION, AND THE CAPABILITY TO CARRY IT OUT

To be outstanding, a team needs a focused and strong internal driving force that is backed
by excellent knowledge. For self-managed teams, this is especially important.
In teams -- as in humans -- the driving forces to tackle challenges are made up of three
important components: vision to provide focus and direction; passion to provide strength and
purpose; and conviction, based on capability, to ensure it will be done. These three factors
are improved with increasing knowledge as implied during the earlier discussions and are,
therefore, readily influenced through education and training.
• Vision of what is possible and how the possible will be of value -- and what it will require
-- is a result of knowledge of the challenge and of the “world around the challenge.” To
be effective, visions must be broad. They must take into account several perspectives and
solution possibilities. Therefore, the goal-setting (idealistic) and systematic knowledge
they are based on must be broad and cover several knowledge domains.
• Passion for the desirability to achieve -- and obtain -- what is possible is a result of
understanding of the broad impacts and value the end results will generate. The better the
possible is known -- based on goal-setting (idealistic) and systematic knowledge -- the

1 Katzenbach & Smith Op. Cit.

Team Work, Collaboration, and Related Knowledge Needs 373

firmer the passion will be anchored. Uncertainty and lack of knowledge undermine
passions with the consequence that priorities are reduced and the combined driving force
is severely impaired.
• Conviction that tackling the challenge is possible, feasible, and achievable with the
resources available is directly a function of systematic, pragmatic, and also automatic
knowledge about the challenge itself. Thorough conviction results in the capability to
carry it out.

A TEAM IS MORE THAN THE SUM OF ALL ITS COMPONENT PARTS -- IT

PROVIDES SYNERGY!

The power of teaming, in part, is that the capability of the resulting team becomes greater
than the sum of the capabilities of all its members. From a knowledge perspective, the team
will not have greater knowledge than the combined knowledge or its members. The
difference lies in the team’s capability to use the knowledge it has. This synergy is
evidenced in several ways:
1. Team members become more secure in their conviction that they can tackle challenges
before them when they know that they have access to other team members’ knowledge.
This is why it is so important for team members to understand and trust each other.
2. The team’s approaches to tackling challenges become more powerful and versatile when
knowledge from several persons, several viewpoints, and several experience backgrounds
is combined. This is one reason why the multi-disciplinary team is so powerful.
3. During activities such as Systematic Problem-Solving, the combined understanding and
visions of the team members lead to faster progress. When generate-and-test problem-
solving methods are used, a good team will create candidates that at the same time are
more advanced and realistic and, therefore, provide superior results after fewer iterations.

INDIVIDUAL WORK STYLES INFLUENCE TEAM WORK STYLES

Whereas team work and collaboration promote synergy and highly creative work
products, it should not be neglected that people’s work styles may vary significantly. Some
people think and contribute best when working in groups. Others need to reflect in solitude to
be productive. It is not possible to create uniform work environments and practices that make
it possible for all people to contribute their best. Instead, it is important that the environments
and practices remain flexible to facilitate both individual work styles and the requirements
demanded by differences in tasks.
We have pointed out that creativity often will require reframing and mulling over what is
known about the challenge to generate new perspectives and new approaches or solutions. In
many instances, it is possible to perform these activities in group sessions. More often, it is
thought, really deep and radical rethinking of what is possible and how to approach challenges
needs to be performed in solitude. Many of the mental processes that we engage in during
these activities are nonconscious. Many of the associations that we pursue to arrive at novel
and creative ideas and perspectives are weak. Many of the patterns that we detect are very
374 Knowledge Management Foundations:
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complex and may only pertain to relatively small subsets of the total feature spaces we
consider. As a result, these situations are “fragile” and, in groups, our thinking is much too
easily derailed by externally imposed perspectives and stimuli to allow us to pursue deep
rethinking.
For quasi-routine work and for consolidating and testing established ideas, group sessions
may be excellent. In these situations, broadly different perspectives and insights are highly
valuable and lead to rapid and powerful evaluations -- and frequently also to important new
perspectives and ideas. However, for the latter to happen, participants need to be well
prepared and have good understanding of the objectives and topic areas. Ideally, they also
need to have pre-established insights and ideas in addition to being flexible and ready to
collaborate.
 375

Part IV
A Knowledge Management Framework
Knowledge, by itself, is very complex and, as discussed at length above, affects almost all
aspects of people and organizations. Unless very good insights and understanding are present,
managing knowledge is very difficult. As indicated, KM is often not pursued, mainly because
it is still a very new and possibly difficult concept and requires understanding and
perspectives that most people are not yet familiar with.
To manage knowledge, both managers and knowledge professionals need systematic
approaches to organize their impressions, develop judgments, and analyze knowledge-related
situations. They also need a set of approaches to decide how to handle these situations given
their best understanding and the practical issues and limitations of the situations they face.
A framework is also necessary to manage knowledge. We need practical procedures and
approaches that are flexible enough to allow us to be innovative and creative. We need tools
that are versatile enough to deal with the variety of situations we encounter. We need
organizational principles and taxonomies that relate to the real conditions that we work with.
Finally, all these aspects of a framework must be effective, efficient, and easily understood so
they can be everybody’s personal property.
Clearly, broad and effective KM is an idealistic goal that will take a very long time to
come about. The framework that is presented in the next pages -- and its supporting
foundations presented in the preceding chapters -- is, only a beginning. However, we think, it
is a step in the right direction.
The framework outlined below is narrow in the sense that it mainly addresses a handful of
approaches and more or less “canned” methods. These are used to enter into situations where
knowledge-workers perform tasks for “business purposes” and allow knowledge professionals
to explore and characterize knowledge-related activities and conditions in more or less detail,
depending on the purpose of the exercise. Some of the methods explore how the knowledge-
related aspects -- from knowledge work, decisions, to learning processes -- might be changed
to improve the organization’s effectiveness and capability.
Many other aspects of knowledge must clearly be the focus of management efforts. Many
of them deal with human resource management. Others involve building knowledge through
research and development or managing the processes for embedding knowledge in technology
376 Knowledge Management Foundations:
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and other manifestations. One aspect touched briefly upon below relates to embedding
knowledge and reasoning in knowledge-based systems and automating knowledge in many
other forms. These areas are pursued extensively worldwide by highly competent academic
and commercial teams, and we will not elaborate on these approaches, but merely note their
existence and the very important contributions they have made.
 377

Chapter 10
Practical Considerations for
Managing Knowledge

This Chapter
Becoming familiar with knowledge and its various aspects is important to be able to
manage knowledge. It is, however, not enough. Whereas the proactive manager will be able
to use the material in the preceding chapters to develop powerful personal approaches to deal
with knowledge, s/he will also need access to well-developed and proven methods that are
effective and can be pursued by many people within their organizations to support broad
management practices. Before a broad practice can practically be pursued, however, the need
to pay more attention to knowledge needs to be accepted and shared.
From a practical perspective, to manage knowledge it is necessary to have an organizing
principle -- a framework -- to classify the different activities and functionalities needed to deal
with all the knowledge-related aspects within the organization. The framework proposed in
Chapter 1 with its three functional groups -- pillars -- is discussed further in this chapter to
delineate the kind of capabilities that are required to manage knowledge in practice.1
At present, a number of methods are known to address KM specifically. Some of these
are discussed with brief indications of their purpose and the questions they address. In all, the
discussion covers five broad top-down, six general KM, three general technical, and two
detailed technical methods, one of which is development of knowledge-based systems. Since
many of these methods overlap or otherwise depend upon each other, the interdependence
between them is illustrated and a brief discussion is provided to explore where, and for which
management purpose, they might be considered.
To conclude this chapter, we provide a brief discussion of practical KM experiences and
introduce some patterns of present KM practices. We distinguish between technology-based
approaches that many of the earlier practitioners pursued, and the broad-based approaches that
now are starting to emerge. Some eight approaches are discussed, starting with knowledge-
based systems and ending with the very broad-based universal management of knowledge

1 A broad discussion of this topic including several practical approaches is presented in Wiig
(1995) A Knowledge Management Methods: Practical Approaches to Manage Knowledge.
378 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

approach.

Pay More Attention to Knowledge!

Among many managers and other professionals, we find that there is a pronounced lack of
focus on knowledge, on which knowledge is required and which conceptual level, form, and
type it need to be held at to perform quality work, as well as a lack of attention to the need to
build knowledge within the organization and ways to do so. If focused on, many will only
identify the practical and factual knowledge required. They neglect to identify what
knowledge workers need to understand “what it means.”
As a result, a large number of mistakes are committed. Most apparent are the short-term
consequences of the tendency to delegate work to individuals and assemble teams of varying
types without ascertaining that requisite knowledge to perform quality work is available. As
discussed, we often see teams and committees assembled to deal with a problem with
members selected to represent viewpoints of their constituencies without regard to whether
the group has the requisite knowledge to tackle their challenge. As a result, many arbitrary
and even wrong decisions are made, much knowledge work ends up being of low-quality, and
the overall performance of organizations and society as a whole suffers.
The lack of an explicit knowledge focus manifests itself in many other ways as well.
Helping individuals to build their personal knowledge base in an effort to become more useful
and valuable is not pursued at all, or is only pursued ad hoc in arbitrary and ineffective ways
often with emphasis on training and factual knowledge. Critical knowledge functions that
require management attention are not identified and knowledge gaps that have detrimental
effects on the organization’s performance are not sought out. Further, valuable experiences
and other knowledge that can serve the organization in the future are rarely captured outside
R&D programs and a few KBS projects. This prevents the organization from ascending the
“knowledge spiral” and becoming an effective learning organization.

We Need a Framework to Manage Knowledge

Why Do We Need a Framework?

In the introductory chapter we presented the concept of a framework for managing

knowledge. To manage knowledge effectively, we need a framework -- a set of systematic
approaches to analyzing, organizing, and developing better ways of handling knowledge.
Unless we have a framework that allows us to understand the present state of knowledge-
related affairs, helps us envision what is possible, and places in context methods and
approaches, our attempts to manage will at best be arbitrary.
Furthermore, without a framework, it is difficult to help interested and motivated people
Practical Considerations for Managing Knowledge 379

build a coherent overview of the important aspects of knowledge that are needed to be able to
“wrap my arms around it,” as a senior executive expressed it. Even more importantly,
without a framework it is almost impossible to help others who have not yet had the
opportunity to discover the importance of knowledge understand the need to pursue KM.
A framework is also required to determine how effective available methodologies and
approaches are, how and why they should be improved, and which knowledge-related
methodologies are still needed. In other words, a framework is needed to support a
coordinated expansion of our understanding of knowledge and how to deal with it. In some
ways, we may look at a KM framework as the beginning of the development of a theory of
knowledge, which presently does not exist.
By its very nature, a KM framework will be artificial. Due to its imposed structure, it may
in some situations limit our ability to be creative in our approaches to dealing with
knowledge. Although this is true for any framework, it is believed that the order it brings will
allow practitioners in all knowledge-related areas to be better informed about what to do.

THE FRAMEWORK RESTS ON THREE PILLARS

As discussed in Chapter 1, active KM must rest upon three general pillars, which
represent the major functions needed to manage knowledge. In practice, each of these
functions consists of a number of formal methodologies and informal approaches. The
framework is illustrated in Figure 10-1. Its pillars consist of the following functional
characteristics:
I. Explore Knowledge and Its Adequacy
To manage knowledge, we first need to investigate and characterize what present
knowledge resources are, what the work requirements are and how well they are
satisfied, and then generally organize our present resources. We need to:
• Survey Knowledge
• Describe and Characterize (i.e. Categorize Knowledge)
• Analyze Knowledge and Knowledge-Related Activities
• Elicit and Codify Knowledge
• Organize Knowledge
II. Assess Value of Knowledge
Before any management activities or changes can be decided upon, we need to determine
what the benefits -- the value -- from them will be. This requires that we:
• Appraise the Value of Knowledge
• Evaluate the Value of Knowledge-Related Actions
380 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Figure 10-1. Pillars of Knowledge Management.

Knowledge Management

I II III
Survey & Synthesize
Categorize Appraise Knowledge-
Knowledge & Related
Evaluate Activities
Analyze Value of
Knowledge Knowledge Handle,
& Use, &
Related & Control
Activities Knowledge
Knowledge-
Elicit, Related Leverage,
Codify, & Actions Distribute, &
Organize Automate
Knowledge Knowledge

Knowledge Management Foundation

Broad Understanding of Knowledge
- Creation - Manifestations - Use - Transfer -

III. Manage Knowledge Actively

After we know what the present situation and potential opportunities are, we can
determine the changes and other activities that are required to achieve our goals. We
must:
• Synthesize Knowledge-Related Activities
• Handle, Use, and Control Knowledge
• Leverage, Distribute, and Automate Knowledge
The framework’s foundation is our general understanding of knowledge as discussed in
the preceding chapters. We need to understand how knowledge is created; how it is
manifested in people’s minds as well as in procedures, culture and even technology; how it is
used in making decisions and other knowledge-related work by individuals and businesses;
and how it is transferred -- that is how we learn and how we otherwise can capture and
exchange knowledge.
Practical Considerations for Managing Knowledge 381

The framework is presented in some detail here to create a beginning understanding of the
functions, indicate how they relate to each other and to the overall task of managing
knowledge, and to illustrate how the concepts and methods can be made useful in business.

I. Explore Knowledge and Its Adequacy

Survey Knowledge. Surveys allow us to identify knowledge and its use at relatively
aggregated levels throughout an enterprise and under different conditions. We survey
knowledge at different levels of depth and with different levels of effort. Surveys are
required to identify which knowledge is available and to gain overviews of knowledge-
based functions that are important and potentially in need of management attention (i.e. to
correct unwanted situations or to take advantage of potentially valuable conditions). It is
also important to define such entities as Critical Knowledge Functions and make these
definitions explicit so they can be used in the practical situation they refer to.
Describe and Characterize (i.e. Categorize Knowledge). Early on, this is perhaps the
most important capability. It allows us to characterize the type and depth of tacit and
explicit knowledge used in business functions and to describe the contents and
competence levels held by individuals or required to perform tasks. It includes the
capability to represent and categorize factual knowledge, reasoning and methodological
knowledge of different kinds, in different situations and uses, at different levels of detail
and aggregation, and with different degrees of concreteness and abstraction.
The range of knowledge characterization detail vary widely. Coarse characterization is
needed after knowledge surveys to provide overviews of which knowledge is available,
where it is, how it is used, and if management attention is required. Other
characterizations are more detailed to establish “which individuals know what” and to
evaluate training needs and promote team building; still others are very detailed as when
we represent knowledge to automate reasoning or describe knowledge for others who will
use it directly. An important and aggregated area is characterization of knowledge needed
to perform specific business functions such as decisions or problem-solving and to
identify available knowledge to decide if the function should be modified, augmented with
additional knowledge through people or systems, or handled in other ways.
Analyze Knowledge and Knowledge-Related Activities. These methods make it
possible to investigate knowledge-related functions of all types to ascertain that learning
opportunities are taken advantage of, that all relevant and valuable knowledge is applied,
or that missing knowledge is created and made available, and so on. Knowledge flows,
for example, are analyzed along four dimensions: knowledge applied in the work function
to make decisions or perform knowledge-intensive tasks to make products or deliver
services; to improve the expertise to make products and deliver service; to improve the
work function itself in terms of its organization, work flow, or in other ways; and to
improve products and services.
Elicit and Codify Knowledge. In many critical knowledge functions, knowledge is
elicited and codified to preserve, accumulate, preserve, disseminate, automate, and control
it. Eliciting knowledge from human experts is difficult, requiring integration of methods
from many disciplines. Knowledge is also acquired from other sources (e.g., observing
how work is performed, pre-codified knowledge in books, laws, regulations, and so on).
Codification involves analyzing the acquired knowledge and includes “rational
reconstruction” to create knowledge models with consistent formats and representations.
382 Knowledge Management Foundations:
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Knowledge models contain structures of reasoning strategies, judgments, concepts, facts,

and connections between individual knowledge items that are valid in different situations.
Organize Knowledge. When knowledge and expertise are identified and described, they
must be organized from particular perspectives and with specific purposes to be useful.
Knowledge may be organized in hierarchies or according to associations with other
knowledge elements. Knowledge is organized within people; in documented materials
such as books, drawings, procedures manuals, and practices; and in knowledge-based
systems and knowledge bases.
To organize knowledge to make it most useful it is particularly important to
understand how one designs, builds, and operates the enterprise’s Knowledge
Architecture. Procedures, guidelines, standards, examples, and KM practices must be
specified and implemented for the whole enterprise for this purpose.

II. Find Value of Knowledge

Appraise the Value of Knowledge. We must appraise the value of knowledge and
explicate the benefits that will result from KM activities. Setting priorities and selecting
what needs to be done to fulfill the enterprise’s objectives, requires comprehensive
knowledge appraisal approaches. The value of knowledge and relevant KM activities can
only be determined as a function of how the present situation will be impacted when the
knowledge in question is used. Typically, the value of knowledge and KM activities is a
function of indirect, often longer-term benefits that must be translated into “bottom-line”
values that have direct relation to the enterprise’s goals and objectives, given projections
of how several intermediate links in the chain will be affected.

III. Manage Knowledge Actively

Synthesize Knowledge-Related Activities. There are many approaches to manage

knowledge with quite different focus areas. We need to synthesize creatively what we
need to do, be it deploy knowledge by automated means to the points-of-use or educate
individuals to possess knowledge.
Handle, Use, and Control Knowledge. We need to synthesize knowledge-related
activities to handle knowledge-related functions that need management attention and to
build, use, and control knowledge with different KM activities. It is necessary to
recognize which of these activities are relevant under different conditions and to
understand their relations and usefulness and what the relevant alternatives are for
managing knowledge under different conditions.
Leverage, Distribute, and Automate Knowledge. We need to leverage and automate
knowledge using knowledge-based systems and other means. Further, we need to
routinize and ease its use wherever applicable to improve its availability and effective use.
To leverage and distribute knowledge effectively and efficiently, it may be necessary to
automate simpler forms of expertise and human reasoning in many ways: (a) in the form
of expert systems; (b) other kinds of knowledge-based systems; and (c) knowledge
embedded in conventional computer-assisted systems and procedures. It has several
decades to bring this area of applied artificial intelligence to practical fruition. It is now is
part of proven technology.
Practical Considerations for Managing Knowledge 383

Some Knowledge Management Approaches

-- Their Purpose and Questions They Address --
Many KM approaches are in use and have been more or less perfected. While some
remain underdeveloped, there are still others that we hardly know about and for which we
have no management approaches. The whole field of managing knowledge will develop
extensively as more attention is being directed to it. Even in an area such as knowledge-based
system development, which has been practical for over a decade, we see significant growth.
New, and more effective representations of both reasoning strategies and factual knowledge
are emerging with significant impacts on the ease of new systems development, and
importantly, increased ability to cover more complex applications. The same type of
development can be expected in all areas of KM.
Development of KM approaches has mostly been dominated by “technologists,” not
always guided by insights of the needs and visions of user organizations. In part, this is due
to the relatively small inroad KM has made in most organizations. Indeed, it essentially is an
“embryonic technology” that still suffers from “technology push” rather than “demand pull.”
Another cause is that many find the concepts of KM to be foreign, even difficult. Hence
managers and business people are not yet participating materially in shaping its directions.
In spite of such reluctance, there are at present good, practical approaches to managing
knowledge, which support various aspects of KM and span a wide range. Specifically, they
support higher- and middle-level management functions as well as providing structured and
efficient approaches to detailed field and technical work. A selection of representative
approaches include the following:
BROAD, TOP-DOWN METHODS
• Knowledge Perspectives for Strategy Development
• General Knowledge Optimizing (Analysis, Synthesis, and Implementation)
• Knowledge Charting
• Knowledge Surveys
• Knowledge Architecture Development
GENERAL KNOWLEDGE MANAGEMENT METHODS
• Task Environment Analysis and Modeling (TEA)
• Critical Knowledge Function Analysis (CKFA)
• Knowledge Flow Analysis (KFA)
• Knowledge Use and Requirements (KURA) Analysis
• Knowledge Scripting and Profiling
• Knowledge Profiling for Personnel Reviews
GENERAL TECHNICAL METHODS
• Appraising Knowledge-Related Activities
384 Knowledge Management Foundations:
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• Skill and Knowledge Inventory Systems

• Knowledge Searches
DETAILED TECHNICAL METHODS
• Capture Knowledge -- Knowledge Elicitation, Acquisition, Modeling, and Encoding
• Knowledge-Based Systems Development
Below we briefly discuss general scopes and questions that these approaches seek to
address. The discussion includes an overview of where these approaches can be used, on a
stand-alone basis or in combination, and how their deliverables may coincide with other
efforts. A more detailed presentation of some of these approaches can be found elsewhere.1

Broad, Top-Down Methods

Knowledge Perspectives for Strategy Development potentially provide the highest level
of support. Developed using several methods, they give insights and alternatives for the
organization’s strategy. The basic goal is to provide answers to questions such as:
• Which knowledge do we need to develop with our R&D programs and what is the
expected value of each potential project?
• What is our core competency and how good is our expertise in this area?
• What are knowledge-related issues that impact business process reengineering?
General Knowledge Optimizing is overall, top-down approach that relies on, and ties
together, other knowledge investigations to connect knowledge-related opportunities to the
broader objectives of the organization. Depending upon the target organization and its
priorities, knowledge optimizing takes different directions and employs different, detailed
methods to analyze present and possible knowledge conditions, synthesize approaches to
improving or exploiting these conditions, and to implementing desired changes. Its basic goal
is to provide answers to questions such as:
• Which specific opportunities can be created to improve knowledge quality, availability,
and use, including restructuring business processes to make it possible?
• Which specific opportunities can be created to improve the value of knowledge to the
organization?
• What are the roles of knowledge in the way work is presently performed?
• What are the quality and availability of knowledge in the present environment?
Knowledge Charting is used to obtain an overall perspective of the knowledge situation

1 Attempts at describing what we consider to be general knowledge management methods are

beginning to appear in the literature. Apart from important extensions of Artificial
Intelligence such as the Initiative for Knowledge Management (IMKA) work and similar
efforts, most are motivational case studies in the management literature. Wiig’s (1995) A
Knowledge Management Methods attempts to provide practical descriptions of a number of
the approaches introduced below.
Practical Considerations for Managing Knowledge 385

within an organization-at-large or within smaller target entities from several points of view. It
identifies critical knowledge functions, important knowledge flows and knowledge assets, and
alternatives that may be considered in dealing with important knowledge-related situations.
Its basic goal is to provide answers to questions such as:
• Where should our management attentions be focused?
• What is the extent of our knowledge-related issues?
Knowledge Surveys, from a managerial perspective, are a set of top-down methods
designed to identify important aspects of the corporation’s knowledge status. Specifying their
purpose is to obtain preliminary overviews of the portfolio of opportunities of knowledge-
related situations that may be addressed. A range of methods exist to explore, survey, and
describe important knowledge-related conditions. The basic goal is to provide answers to
questions such as:
• Which special and valuable knowledge is available and where is it located?
• Which knowledge-related areas require further investigation and management attention?
• Which knowledge-related management actions appear important and should receive
priority.
Knowledge Architecture Development establishes the organization’s overall knowledge
architecture in an effort provide a long-term corporate capability. The decision to build a
knowledge architecture is top-down, typically supported and initiated from executive
management. The basic goal is to provide answers to such questions as:
• How can we best organize our knowledge-related efforts -- human resources, educational
materials and programs, libraries, computer-based knowledge-bases, knowledge-based
systems, and so on?
• Which knowledge technologies will serve our purposes and are they mature enough?

General Knowledge Management Methods

Task Environment Analysis and Modeling (TEA) explores and describes knowledge-
related activities in target functions. TEA provides insight into and understanding of how
work is performed, and interacts with all aspects of the environment. It also provides a basis
for how work function may be reengineered. TEA is in part based on ethnographic methods
and is often the initial investigation. Its basic goal is to provide answers to questions such as:
• How is the target function organized from business, work practices, decision-making and
authorization, social, cultural, and physical perspectives?
• What are effects on target function of company policies and objectives, operating and
management practices, physical environment, organizational structure, and work flows?
• How do knowledge-workers work? What are their work styles and work practices?
• How and why do knowledge-workers network with others within and without the target
function?
• What are the physical and knowledge-intensive work scripts, for routine and regular and
386 Knowledge Management Foundations:
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nonroutine tasks? What are the activities within each script?

• What are target function artifacts and what role do they play in performing work?
• What are target function components and their taxonomies?
• Which cultural themes govern behavior in target function? Which cultural factors
facilitate and which inhibit intelligent-acting behaviors?
• What are opportunities for changes?
Critical Knowledge Function Analysis (CKFA) investigates operational functions with
knowledge-related deficiencies or unrealized opportunities that may need management
attention. Specific approaches are available to explore and analyze CKFs for a wide range of
conditions. The basic goal is to provide answers to questions such as:
• For the CKF in question, what are: 1. Knowledge used; 2. Its business use; 3. Constraint
preventing full use, vulnerability, or unrealized opportunity; 4. Alternatives for changes;
5. Expected value of changes?
Knowledge Flow Analysis (KFA) explores the adequacy of knowledge flows in, and
around target functions. Knowledge flows of particular importance deal with how knowledge
is applied to work objects or used for decisions, how it is built to improve work, and built and
applied to improve work functions and to renew products and services. Its basic goal is to
provide answers to questions such as:
• Is the organization learning faster than the world changes?
• How can organizational learning be improved? What are present strengths and
weaknesses of knowledge flows at all levels?
• Is knowledge pooled adequately and appropriately to be available to deal with routine and
unusual challenges?
• What are the sources from which knowledge-workers might learn?
• Are the most knowledgeable parties consulted for continuous improvement and process
reengineering?
• Which opportunities exist or may be created to improve knowledge flows?
Knowledge Use and Requirements Analysis (KURA) investigates the state of
knowledge, its use, and requirements for performing quality work. KURA can rely on TEA
for part of its field work and analysis. Its basic goal is to provide answers to questions such
as:
• What are the knowledge areas that are required to perform quality work in the target
function?
• Which knowledge-intensive activities are performed -- in total, and for each work script?
Which are visible and which are hidden? What are their mental strategies and processes?
Which problem-solving approaches are used -- generic and problem-specific?
• Which decisions are made in target function, and which decisions are delegated or sent
upstairs? Why? How are decisions made?
• What knowledge -- and at what proficiency level -- is required for quality decisions and
knowledge-intensive activities?
• Which information -- and at what detail -- is required for quality decisions and knowledge-
Practical Considerations for Managing Knowledge 387

intensive activities?
• What are the knowledge flows within and which are exchanged with external entities?
• What are the information flows within and which are exchanged with external entities?
Knowledge Scripting and Profiling (KS&P) analyzes and portrays proficiencies
required to perform knowledge-intensive tasks competently for each work script in the target
function. It distinguishes between required “Knowledge,” “Skills,” and “Personal
Characteristics.” Knowledge profiling can rely on TEA and KURA to provide its field work
and analysis. Its basic goal is to provide answers to questions such as:
• What are required knowledge areas for well-rounded and competent workers in this
function?
• What are the dominant and most important (value-added and frequent) knowledge
intensive steps and tasks?
• Which concept hierarchies and mental models do expert knowledge workers build to form
expectations and apply judgments for the important situations?
• What should curricula contain for effective teaching programs to prepare workers to
deliver quality work?
• Which educational and training backgrounds must new employees have to perform?
• What are the knowledge gaps and development requirements for “average” workers in the
area?
Knowledge Profiling for Personnel Reviews characterizes the knowledge, skill, and
personal characteristics requirements for particular positions and individuals. Explicit and
objective representations remove subjective conflicts and provide constructive discussions.
Its basic goal is to provide answers to questions such as:
• Are these the knowledge areas and corresponding levels of proficiency that in your
opinion are required to perform quality -- creative, error-free, timely -- work for these
tasks?
• Given your background, what are your levels of proficiency in these knowledge areas and
how can we assemble a knowledge development program that will help you build your
capabilities?

General Technical Methods

Appraising Knowledge-Related Activities often deal with complex situations that have
indirect and long-term benefits and costs. It is important to appraise the value of such
activities with methods that support analysis of such intangible benefits in addition to the
conventional tangible benefits. The basic goal is to provide answers to questions such as:
• What is the long-term value of increasing our expertise in this area?
• Will the short- and long-term economic benefits from this research program be sufficient
to cover its costs?
• What is the value of providing the customer service function with greater expertise?
388 Knowledge Management Foundations:
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Skill and Knowledge Inventory System Development. Skills and knowledge

inventories are examples of how knowledge about the organization’s knowledge assets may
be developed and organized to be used for such purposes as project staff selection and
planning which products and services the corporation should provide. The basic goal is to
provide answers to questions such as:
• Do we have sufficient “critical mass” in our core competence area?
• Where do we have people with this expertise and experience?
• Do we have the requisite expertise to develop, produce, and service this product?
• Where do we need to concentrate our education and training?
Knowledge Searches. Several emerging and important approaches support searches to
find knowledge automatically from existing documents that are stored electronically. These
knowledge search approaches, now coming into use to support legal searches, for example,
are based on powerful quasi-natural language understanding techniques. Searches are
conducted to locate material in documents that treat, or are related to, specified topics of
interest. Topics are typically described as concepts that can be quite abstract and semantically
distant from the actual wording and specification of the located material. The basic goal is to
provide answers to questions such as:
• What is known (within the accessible knowledge base) about this topic?
• What are related topics, how are they treated, where can they be found?

Detailed Technical Methods

Capture Knowledge -- Knowledge Elicitation, Acquisition, Modeling, and Encoding.

Powerful methods have been developed to gather knowledge from people and other sources,
analyze it, and synthesize it into knowledge models and encode it into forms suitable for a
variety of uses.1
A number of organizations are regularly capturing knowledge by eliciting it from experts
and others with valuable knowledge. The knowledge is increasingly encoded in computer-
based knowledge bases, or in other forms such as videos or traditional paper-based
documents. The basic goals are to “prevent reinventing the wheel” and to make the
knowledge available when needed. It also provides answers to questions such as:
• Have we experienced this before -- how was it handled -- with what results?
• Based on our experience, what is the best way to handle this situation?

1Knowledge acquisition is a field in rapid development, particularly with the emerging

capabilities to perform automatic knowledge acquisition (induction from examples is one
approach). More conventional approaches are treated by McGraw & Harbison-Briggs (1989).
Another approach is the Knowledge Acquisition and Design Structure (KADS) methodology
developed for the European Commission by Wielinga et al (1992).
Practical Considerations for Managing Knowledge 389

• Given a challenge of this kind, what are the primary factors that I should think about, and
how do I include them in my considerations?
Knowledge-Based Systems (KBS) Development. Many technical approaches and tools are
available to develop automated KBSs often with active reasoning -- as workaids, learning
systems, and for many other purposes. These methods are mature and broadly used although
significant improvements are constantly made. KBS development relies upon knowledge
elicitation, modeling, and encoding methods, most of which are commercially available.1

How Can We Use the Various Knowledge Management

Methods?
The KM methods presented in the previous section provide supports for nearly all levels
and functions within an organization. Several of them can serve multiple purposes and be of
support for many levels within the organization. Examples of the major uses of these
methods are provided in Table 10-1. The available methods support many areas, but often
have to be modified -- at times substantially -- to serve particular purposes.
The KM methods described above often overlap or are dependent on results from
preceding investigations. Some of the relevant relationships between the methods presented
above are shown in Figure 10-2. From this figure it can be seen that it often may be
convenient to start with knowledge surveys or task environment analyses and modeling
(TEA). At other times it may desirable to proceed directly to some of the other methods such
as knowledge use and requirements analysis (KURA) or knowledge scripting and profiling.
When needed, these methods can be augmented with approaches from other methods to
customize the work to achieve a sharper and more effective focus.
To simplify the presentation, we have grouped the major management purposes of interest
into seven categories. These range from upper management’s activities to create new
strategies to the knowledge-workers’ application of knowledge to work objects in the most
detailed work functions.

1 Considerable literature exists on KBS development. Many professional journals, both

theoretical and practically oriented, are devoted to KBS developments. A large number of
books also exists. Reference to some of these sources can be found in Appendix A.
390 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Table 10-1. Examples of How Knowledge Management Methods Support Management

Functions at Different Levels in the Organization.
Major Potential Examples of
Management Knowledge Management Knowledge Management
Purpose Methods Activities
Plan, Create, and Knowledge Optimizing Change Knowledge Architecture
Implement New Knowledge Charting Build Selected Knowledge
Corporate Strategies Focused Knowledge Surveys Build Corporate Learning Framework
Plan and Create New Focused Knowledge Surveys Build Selected Knowledge
Products and Services Knowledge Flow Analysis Create New Knowledge (R&D)
Improve and Focused Knowledge Surveys Consult with All Who Know
Renew Task Environment Analysis Build Selected Knowledge
Products and Services Knowledge Flow Analysis Create New Knowledge (R&D)
Create and Acquire Task Environment Analysis Joint Ventures
New Major Resources Knowledge Charting Hiring Programs
(Facilities, JVs, Staff) Knowledge Flow Analysis Educate and Re-Educate
Learn How to, Task Environment Analysis Consult with All Who Know
and Implement, Knowledge Flow Analysis Redistribute Knowledge-Intensive
Business Process CKF Analysis and KURA Activities, Build Collaborating Teams
Reengineering Knowledge Profiling & Optimizing Improve Knowledge Flows
Learn How to, Knowledge Flow Analysis Deploy KBSs, Educate, Train
and Implement, Task Environment Analysis Improve Knowledge Flows
“Working Smarter” CKF Analysis and KURA Consult with All Who Know
Build Knowledge to Capture Knowledge Build Knowledge Bases and KBSs
Make Products and Task Environment Analysis Educate and Train
Provide Services better Knowledge Flow Analysis Build Collaborating Teams
Practical Considerations for Managing Knowledge 391

Figure 10-2. Examples of Interdependence Between Typical Knowledge Management

Methods.
Knowledge Knowledge
Knowledge
Perspectives for Architecture
Optimizing
Strategy Development Development

Appraising
Knowledge
Knowledge-Related
Charting
Activities

Knowledge Use & Knowledge Knowledge

Requirements Scripting and Profiling Profiling for
Analysis (KURA) Personnel Reviews

Knowledge Knowledge-Based Skill & Knowledge

Flow Systems (KBS) Inventory
Analysis Development Systems

Critical Knowledge Knowledge Capture

Knowledge
Function Analysis Elicit, Acquire
Searches
(CKF) Model, Encode

Task Environment
Knowledge
Analysis &
Surveys
Modeling (TEAM)

Practical Knowledge Management Experiences

There is a beginning awareness that the information society is gradually turning into a
knowledge society, changing the rules for conducting business almost before we have
understood what the information society was all about. In this new world, the factor that
increasingly separates the successful organizations from the rest is the knowledge that can be
made available and marshaled to perform.1
In this environment, many companies have started to recognize they must be intelligent-
acting to succeed. That realization leads to management initiatives like “Learning

1See, for example, Böhme & Stehr (1986), Cleveland (1985), Nonaka (1991), Sakaiya (1991),
and Drucker (1993).
392 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Organizations,” “Total Quality Management,” “Business Process Reengineering,” and “Core

Competency Focus.” The value of such initiatives and the organization’s capability to act
intelligently depend directly upon how well the organization manages (i.e., builds, distributes,
uses, and controls) its knowledge assets. To be effective requires broad KM with activities in
many areas ranging from ascertaining that appropriate knowledge is available for performing
critical knowledge-intensive tasks, to human resource management, R&D, and to computer-
based knowledge bases.
Several corporations pursue a range of knowledge-dependent management initiatives.
Quite a few build and use knowledge-based systems -- often as simple expert systems.
Relatively few, and only highly proactive corporations, consider broader aspects of managing
knowledge. However, some consider it purely a technical effort, others understand that it is
much broader, affects all aspects of the organization, and virtually requires the involvement of
everybody within it.

Basic Reasons for Managing Knowledge

The basic reason for managing knowledge is to make the organization act more
intelligently in the way it conducts business and performs internal operations. Often, that
purpose is not recognized or expressed explicitly. Instead, organizations may focus on
improving behavioral factors that are merely symptoms or indications of underlying
knowledge. For example, they ask people to cooperate better, be more responsible and not
“toss problems over the wall to the next department,” and so on. Without considering
knowledge, therefore, they may still pursue knowledge-dependent behaviors in an effort to
improve quality, focus on continuous improvement, or emphasize core competencies. Such
one-sided approaches invariably will result in isolated and single-minded management
initiatives that frequently fail to produce the expected results.
Leading organizations, however, achieve their superior performance by promoting
intelligent-acting behavior by individuals through delegation of authority, management and
work practices, and effective organizational structures. At the same time, they ascertain that
those who are given added responsibilities also are provided with the appropriate knowledge
to execute their responsibilities competently. These organizations realize that intelligent-
acting behavior is largely a result of the individual’s knowledge and the external and personal
permissions to use it -- the incentives provided.
Such changes result in dependable and rapid delivery of products and services, improved
quality and conformance to customer specifications, continuous improvement, flexibility,
effective internal operations, and numerous other benefits used to gage effectiveness and
progress. Together, these results serve the goal to improve the organization’s performance of
profitability, viability, and relationships to customers, employees, and society as a whole. A
conceptual model of how performance depends upon the intelligent-acting behaviors of the
organization and its individuals is illustrated in Figure 10-3.
Practical Considerations for Managing Knowledge 393

Figure 10-3. Conceptual Model of the Interplay Between Knowledge and Other Basic
Factors That Combine to Affect Corporate Performance.

- KNOWLEDGE - - Authority -
- Practices -

Intelligent-Acting Improved Improved

Individuals Performance Corporate
- Initiative Rich - Characteristics PERFORMANCE
- Creative Problem Solver - - Quality - - Profitability -
- Decisive - - Effectiveness - - Viability -
- Follow Up to Implement - - Responsiveness - - Relationships -

Intelligent-Acting
Organization Organizational
- Incentives -
Structures

Figure 10-4. Domain of Knowledge Management.

Build Knowledge
- Innovate & Learn -
- Educate & Train -
- Perform Research -
Knowledge
- Hire Knowledgeable People -
Arbitrarily Understanding of
- Buy Technology -
Organized Knowledge Needs
and and
Distributed Learn Opportunities
from
Performing
Work
Organize & Focus Knowledge Investigate Knowledge
Codified
- In People's Minds - - Knowledge Surveys -
Knowledge
- In Documents & Books - - Task Environment Analysis -
- In KBSs & Knowledge Bases - Knowledge - Knowledge Use and
- In Organizational Structure - Focus Requirements Analysis -
- In Technology - and - Knowledge Acquisition -
Organizing
Principles
Knowledge Prospects for
Ready to be and
Applied or Experiences with
Exploited Realize Knowledge Value Knowledge
Use and Demand
Apply Knowledge Exploit Knowledge
- Perform Knowledge Work - - Sell Products -
- Solve Problems - - Sell Patents & Technology -
- Make Decisions - - Sell Software -
- Automate Routine Work - - Sell Advise & Practices -
- Support Knowledge Workers - - Transfer Technology -
- Deploy Intelligent Agents -
394 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

Patterns of Knowledge Management Practices

The domain of KM practices is broad and may cover all aspects of knowledge building
from learning on the job and training programs, to R&D, and deploying and applying
knowledge by reallocating personnel to develop and install knowledge-based systems. A
perspective of the KM domain is illustrated in Figure 10-4 which lists some examples of the
detailed activities and characteristics involved. Present approaches to managing knowledge
vary considerably. Several, often narrow, patterns have emerged as typical at this time. Some
of these are technology-based. Others are “broad-based” and although they may employ
technology for support, they focus on knowledge-based aspects that are not technology-
related. Some of the more typical patterns include:
TECHNOLOGY-BASED APPROACHES
• Knowledge-Based System (the Artificial Intelligence Approach)
• Knowledge Integration
• Technical Knowledge Asset Management
BROAD-BASED APPROACHES
• Core Competencies
• Learning Organization
• Human Resource Management
• Knowledge Analysis
• Universal Management of Knowledge
Introducing and implementing KM practices within an organization is not a swift process.
Most organizations start with a narrow approach by focusing on issues of known importance
and within their current ability to handle them. It may take a year or more to broaden the
approach while building understanding and capabilities. For truly broad KM practices -- with
active bottom-up and thoughtful top-down guidance -- to be implemented, it will not be
surprising if a decade or two will be required. Only after managers and knowledge-workers
have started to appreciate the advantages of managing knowledge assets and processes and
after demonstrations of successful and highly visible applications do the concept and practices
spread.

TECHNOLOGY-BASED APPROACHES

Knowledge-Based System (KBS) Approach

About 12 years ago, Digital Equipment Corporation (DEC) successfully introduced its
first KBS -- XCON -- to configure VAX computers. It applied AI methods to automate
human reasoning in an expert system. Later, DuPont deployed hundreds of expert systems in
all operational areas, most small and stand-alone, but many of corporate significance. In the
Practical Considerations for Managing Knowledge 395

1980s, many organizations -- financial services firms, manufacturing organizations,

Government agencies, and other organizations -- experimented with and deployed valuable
rule-based expert systems that were followed by more sophisticated KBSs using a variety of
AI methodologies. To date, however, surprisingly few organizations have successfully
developed and deployed this technology. In spite of spectacular results reported by those who
use the technology, most are still debating whether or not to exploit it. Although difficult to
estimate, it is believed that well over one thousand organizations appear to have implemented
successful KBS applications at this time.
KBS applications continue to increase in sophistication. New approaches that often are
not directly associated with traditional directions are emerging. They include neural
networks, case-based reasoning, fuzzy or qualitative reasoning, and many other techniques
that increase the value of KBSs while also making many systems easier and less costly to
implement. For example, CBR is gaining wide acceptance, particularly in areas such as help
desk support systems for high technology equipment support, credit authorization in financial
institutions, to chemical products customer support.
However, the KBS approach is a narrow segment of KM and although it serves very
valuable purposes, it is frequently used as only a “somewhat better” way of continuing status
quo. In some organizations it is even considered an outgrowth of information technology and
is often applied with that limited perspective. Instead, those organizations that pursue broad
KM, often as part of business process redesign, use knowledge-based systems competently as
one of many methods, and seem to derive considerable value from their approach.
We can argue that KBS approaches spread slowly since they break fundamentally with
traditional perspectives of how work is performed. Unless knowledge elicitation and
modeling is performed with sufficient expertise, and the affected work is redesigned, the
resulting systems become shallow and of relatively little use. Effective methodologies are
also difficult to master and take more time to acquire than most organizations and
professionals are willing to invest.

Integrated Intelligent-Agent Approach

Many organizations that started with successful KBS applications have proceeded one
step further after discovering that considerable opportunities and values can be realized by
networking related KBS applications to create an integrated capability. DEC pioneered this
concept by networking its configuration KBS with an integrated family of KBSs for sales
support, production scheduling, parts management, and longer-term operations planning.
Other firms have followed similar strategies to put operational knowledge on-line to tie
together different departments and functional entities in an attempt to apply the best expertise
to shared problems. A major benefit of these efforts is that it is often possible to automate
tasks that previously could not be performed at all, leading to much better results -- very fast
and with full internal consistency.
Only a few dozen organizations are known to have implemented integrated KBS
396 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

applications networks, partly because of difficult technological issues, partly because of the
institutional and conceptual hurdles that must be overcome to bring about such change. The
integrated intelligent-agent approach seeks to create coordinated processes that perform well-
defined tasks automatically and intelligently and integrate operational activities throughout an
organization. Some of these processes are implemented to “let the right hand know what the
left hand is doing,” while also ascertaining that “both hands are doing the right thing under the
circumstances.”

IMKA -- A Technical Knowledge Asset Management Approach

In 1990, several organizations, including US West, DEC, Ford, and TI, collaborated to
form the Initiative for Managing Knowledge Assets (IMKA) for the purpose of developing
standardized technology to capture and deploy knowledge across the organization. This
consortium, now in “Phase 3,” has resulted in deployment of significant KBS applications
using the technology. IMKA’s purpose is to overcome and advance technological issues
associated with integrated KBS applications and computer-based knowledge-bases. Its
present focus is to develop approaches for libraries of knowledge bases that can be used over
networks by knowledge-workers or fully automated systems.
Another aspect of this approach deals with introduction of limited natural language
understanding to gain access to, or to organize, implicit knowledge embedded in public and
in-house documents. Very powerful approaches are now being introduced, particularly in the
legal and medical professions to “mine” documented knowledge -- or at times, just
information. The most powerful methods work with concept-based automatic reasoning and
handle databases that exceed 10 tera bytes.1

BROAD-BASED APPROACHES
Core Competencies Approach

A number of organizations are starting to focus on “what they are good at” -- their
dominant area of expertise or core competency. A financial firm, for example, may find that
its core competency -- what makes it successful in the market place -- is its ability to provide
high-yield mutual funds; a manufacturing company may find it is its high technology designs
of compressors, and so on.
Firms pursue this aspect of KM to answer two questions: (a) How can we improve our
core knowledge to become better? and (b) How can we include our dominant expertise
differently into products and services to increase the value and demand for our offerings?
From a KM perspective, identifying, focusing on, strengthening, and exploiting or applying
the core competency is an objective that a knowledge organization must actually pursue.

1Perhaps the most powerful of these approaches is provided by ConQuest Software, Inc. in
Columbia, MD.
Practical Considerations for Managing Knowledge 397

However, the core competency approach, has a relatively narrow focus and overlooks
most of the supporting knowledge processes that build and maintain it and make it available
to the employees that use it to create and deliver products and services.

Learning Organization Approach

Another popular knowledge-related management initiative involves transforming the

organization into a “Learning Organization.” The rationale behind this concept is that to keep
abreast of competition, the organization must build explicit practices to learn quickly and
thoroughly -- and implement what is being learned faster than the surrounding world changes.
If the organization learns slower, it falls behind. As Garvin (1993) pointed out, creating an
effective learning organization is complex and requires great management and staff
investments to change paradigms and implement cultural and operational changes.
Nevertheless, a number of organizations are working hard to become effective learning
organizations. Often this initiative follows Total Quality Management or Core Competency
initiatives after these open understandings of the need to keep abreast.
The learning organization approach leads to a number of tactical steps. Some are
associated with deliberate ”benchmarking” activities. Others involve formal market,
customer, and competitive intelligence gathering and analysis, as well as internal
communication programs. Still others provide new emphasis on employee education and
training -- at times with very sophisticated CBT approaches and large time budgets for
learning. One important example is the Federal Express Corporation, which has based much
of its success on ascertaining that all its employees are well educated to be able to deal with
all kinds of routine tasks and a broad range of nonroutine challenges.
Much of what needs to be learned is generated internally from experiences or by
unusually competent people. Some organizations have instituted “lessons-learned” programs
to capture valuable experiences as they happen. Other firms have started to ensure that they
minimize loss of valuable expertise when knowledgeable people are promoted, retire, or
otherwise become unavailable. These firms have instituted methods to elicit and organize
valuable expertise prior to experts’ departure.

Human Resource Management Approaches

One interesting approach to KM has emerged in support of human resources. It was

initially used in several organizations with prior experience with knowledge-based systems
development or with knowledge optimizing. Methods such as knowledge profiling and
knowledge use and requirements analysis are used to identify and explicitly characterize
knowledge areas and proficiencies required for particular positions and tasks and to provide a
framework for personnel evaluation and reviews. Managers have always considered
personnel reviews to be difficult but find that the knowledge-based framework often changes
the process from being confrontational to be collaborative and creative. It helps to identify
398 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

personnel growth paths and determine educational needs that are easily aggregated to
corporate programs. In many situations, the approach has also led to identification and
introduction of powerful performance-enhancing work aids such as decision support systems.
Other organizations have introduced comprehensive “skill inventory” systems that contain
extensive information on professional capabilities -- areas of expertise and levels of
proficiency for each of their employees. These inventories are used to build highly qualified
project teams in engineering firms and other project-oriented organizations, and to identify
hiring requirements, detect valuable but underutilized expertise and, in less desirable
situations, decide where there is excess capacity.

Knowledge Optimizing Approach

An increasing number of organizations, but still only a few -- some of them financial
firms -- focus on managing knowledge through in-depth task-environment and other
knowledge analysis methods to determine potentials for improving knowledge work and
decision-making. Typically, critical target functions such as underwriting, customer service,
instrumentation maintenance, or design engineering are investigated. Less frequent, but very
valuable target functions include general managers and their line organizations.
This approach to KM explores and analyzes the target function’s present and potential
overall functionality, its knowledge-intensive activities and different approaches to
performing these activities, as well as the knowledge flows -- exchanges, pooling, knowledge
building, and higher level uses. To perform these investigations, methods are used to
determine what the knowledge “is about” rather than what it is in detail, as required when
developing knowledge-based systems.
Knowledge use and requirements analysis of target functions is a required investigation
in business process reengineering. It provides explicit insights into the way knowledge work
is, and may be, performed by addressing such questions as: Which knowledge is available
within the function? How is knowledge now utilized? What knowledge and level of
expertise are required to perform quality work within the various activities that constitutes the
function? Where are the knowledge gaps? What are the knowledge flows? Which changes
should be implemented to improve? How should work be distributed between experts,
specialists, and knowledge-workers with different proficiencies. Who is most competent to
make decisions? Which cultural factors impede, and which facilitate the use and building of
knowledge?
In practice, knowledge analysis appears to be exceedingly important since it provides
opportunities for direct and explicit management of knowledge as the basic factor that drives
the organization’s ability to perform and compete.
Practical Considerations for Managing Knowledge 399

Universal Management of Knowledge Approach

A few highly-motivated organizations pursue a drastically different approach to managing

knowledge. Viewing knowledge as the decisive and fundamental driving force of success,
they have initiated organization-wide practices to facilitate knowledge building and use.
These organizations invest considerable resources to ascertain that each employee possesses
the requisite knowledge and receives all the incentives and opportunities necessary to apply it
in the organization’s interest. To make that possible, these organizations also make sure that
employees understand -- the details of their goals, policies, and current and expected
performance by adopting a “holographic management” paradigm where every employee
replicates the visions and objectives of the leaders. Finally, they ascertain that the internal
culture supports the underlying philosophy.
Perhaps the best example of a sophisticated approach to universal management of
knowledge is Chaparral Steel. This relatively small company, where all employees are
salaried, provide extensive in-house mandatory education for everyone. One interesting
aspect is that the company develops much of its sophisticated process equipment but does not
have a research and development capability. Instead, “everyone is part of the R&D effort”
and is encouraged to explore better ways at all times.1

Some Observations

The scopes of different KM practices vary. Some are narrow and address a single activity
such as many KBS applications. Others are broad such as when the management decides that
the entire organization will become an active learning organization. At the same time, the
scope may be heavily centered on the technical solutions or, in the opposite, may be fully
non-technical in its focus. Examples of potential scopes for the KM practices discussed above
are illustrated in Figure 10-5.
It is interesting to observe that although many service organizations recognize that they
are “knowledge companies,” they pay little or no attention to explicit management of their
knowledge processes and assets. For example, they often do not focus on how to prepare
their knowledge-workers to perform the activities required, to assemble teams with the
required knowledge, to ascertain that valuable knowledge is captured, preserved, and shared,
or on many other aspects of KM. Instead, many firms only train their employees to perform
routine tasks and provide them with factual knowledge. They do not educate them to
understand what the facts they give them mean in the various situations where they apply.
Others, such as consulting firms, financial service firms, engineering firms, and specialty
firms like drug and high technology companies may only focus on how to cash in on their

1 An interesting discussion of Chaparral’s concept of “The Factory as a Learning Laboratory”

is provided by Leonard-Barton (1992).
400 Knowledge Management Foundations:
Thinking About Thinking -- How People and Organizations Create, Represent, and Use Knowledge

present products and on planning which new products they need to develop to stay in the
game. They do not explore how they can strengthen their work force by providing them with
broad knowledge to make it possible for them to deliver higher quality work with the same
effort.

Figure 10-5. Potential Scopes of Selected Knowledge Management Practices.

Nature of
Approach
Core Competencies Approach

Non-Technical
Approach
Human Resource Learning
Management Knowledge Optimizing Organization
Approach Approach Approach
Combined
Non-Technical
& Technical Universal
Approach Knowledge
Approach
KBS Knowledge Integration
Development Approach
Technical &
Approach Deployment Technical Knowledge Asset
Approach Management Approach Scope

Very Narrow Narrow Broad Very Broad

Single Activity Single Function Multiple Function Organization-Wide
Scope Scope Scope Scope

Except for a very few,1 most organizations have not yet developed the capabilities or
perspectives that allow them to consider aspects of knowledge explicitly in such a way that
they can manage their most precious asset effectively. Rather, they haphazardly let
knowledge manage itself or let each manager do it in his or her own way. They hire good
people but typically let them fend for themselves to keep abreast in their fields. They do not
identify and provide crucial knowledge that is required to operate effectively within their
organizations. They do not identify the knowledge needed to perform critical knowledge-
intensive activities in any detail except for selected professional areas. They do not ascertain
that the best knowledge is captured, deployed, and used to the organization’s best advantage.
They do not see to that the organization continually builds knowledge -- ascends the
knowledge spiral. In short, they do not pay much attention to knowledge.

1 Bell Labs, Chaparral Steel, and Analog Devices can be named as examples of companies
that have progressed to the point that they are acutely concerned with in-house knowledge
processes as a foundation for their success.
Practical Considerations for Managing Knowledge 401

A FINAL VIEW

Deliberate KM is in the very beginning stages of being accepted. The concept that
knowledge can be managed is still unknown to most managers and executives. Nevertheless,
a handful of organizations have started to manage its knowledge deliberately and see it as a
powerful tool to ensuring success and viability. In many respects, Digital Equipment
Corporation can be used as a model for how knowledge can be managed effectively from a
technical perspective. Other organizations, however, have decided to adopt a much broader
perspective and pursue KM in many nontechnical ways that may be as powerful -- if not more
powerful -- than automating knowledge bases and reasoning.
Effective KM is only possible when corporate philosophy, culture, and management
practices are changed to support this approach. It is also a requirement that corporate
management spearheads the initiative with visions, leadership, allocation of resources, and
desire to exploit the leveraged capabilities and opportunities.
Extensive KM that involve KBS development -- and to a larger extent knowledge
optimizing -- requires new professional capabilities for which there presently are few sources.
The knowledge required to perform competently in this area is too broad for single
individuals to master. New professional teams are needed with combined understanding of
cognitive science (selected aspects of human psychology, artificial intelligence, and
linguistics), modern management science, sociology, management and organizational theory,
and modern information sciences.
As knowledge technology advances -- in KBS and related methodologies, knowledge
elicitation and modeling, natural language understanding, human-machine communication,
virtual reality, and other areas that we have not yet discovered -- we can expect that it will
increasingly facilitate deliberate KM thereby greatly benefiting all of us.
 402

Appendices

- 402 -
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Appendix B
Glossary
Abductive Reasoning: A special case of inductive reasoning resulting in specific assertions that imply the
available information in context of the background knowledge without logical certainty. Example: Premise:
"Those dogs are mastiffs." Background knowledge: "All Erik's dogs are Mastiffs." Hypothesis: "Perhaps those
dogs are Erik's."
Acquisition: (See Knowledge Acquisition) Knowledge may be acquired and represented for inclusion in a
knowledge model. Acquisition can be performed by eliciting knowledge from a domain expert, inducing
knowledge from examples, porting knowledge from data bases, and by other methods.
Adjacent Function: A business function that exchanges (provides or receives) consultation or collaboration
resources, information, or secondary work products with the target function.
AI Technologist: A professional with good applied knowledge of basic AI techniques and selected tools used in
the professional's environment. AI technologists are capable encoders of knowledge from codified knowledge
and may be proficient AI programmers.
Artificial Intelligence (AI): "A subfield of computer science concerned with pursuing the possibility that a
computer can be made to behave in ways that humans recognize as 'intelligent' behavior in each other." (The
Fifth Generation, Feigenbaum and McCorduck (1983)). Applied AI becomes a broader field than AI,
including cognitive, social and management sciences.
Backward-Chaining: A (computerized) search technique used in production (i.e., "if-then" rule) systems that
begins with the action clause of a rule and works backward through a chain of rules in an attempt to find a
verifiable set of condition clauses. (Also termed "goal-oriented reasoning" or "top-down search.") Inference
engines backward-chain from one if-then rule to other rules in the knowledgebase to find new values needed to
test if-conditions stated in the rule.
Blackboard Systems: Knowledge-based systems that consist of several separate reasoning processes that use a
"blackboard" to "post" intermediate results or information that needs to be communicated between the various
systems. Blackboard systems may be used for multiple-hypothesis reasoning.
Certainty Factor: Either a number supplied by an expert system to indicate the system's level of confidence in
the conclusion or a number supplied by the user of an expert system to indicate the user's level of confidence
in the validity of the information supplied to the system.
Codification: Knowledge codification deals with obtaining, characterizing, and validating knowledge. It
includes of elicitation or acquisition, analysis, and synthesis (rational reconstruction) of knowledge to
generate internally consistent knowledge models that are congruent with domain knowledge as held by experts
or existing as previously codified bodies of knowledge.
Cognitive Engineering: A recently coined term to denote the professional field concerned with analysis and
synthesis of systems that interact with human cognitive functions. They encompass: Human behavior in the
real target world; Ecological aspects of that world; Semantic contents of the target domain; Behavior and
performance; and Implications of changing cognitive-related aspects of the target domain.
Cognitive Science: The field that investigates the details of the mechanics of human intelligence to determine
the process that produces that intelligence.
Cognitive Style: An individual’s mental approach and reasoning style. Cognitive styles include preferences for
graphic or verbal representations of concepts, hemispheric dominance, and so on.
Concept: An abstract or general idea often generalized from specific instances. A concept can be a mental
model and be tied to other concepts through associations.

410
Appendix B. Glossary 411

Database: Information stored in a computer for subsequent retrieval. Databases are structured to support data
architectures; modern databases are relational databases. Data bases may be "flat," relational, or object-
oriented.
Declarative Knowledge: Facts about, and relations between, objects (such as abstract concepts or physical
objects), events, and situations stated in some representation such as rules or clauses.
Deductive Reasoning: Reasoning to deduce information about the situation under analysis such as deducing
facts or premises from hypotheses and rules given the background or domain knowledge.
Domain: A bounded part of a larger system. May be a specific area of knowledge such as “the domain of
financial knowledge.” May at times be the knowledge or expertise area of a knowledge-based system.
Domain Expert: A person with expertise in the domain of the target knowledge area such as a knowledge-
based system being developed. The domain expert often works closely with the knowledge engineer
(particularly the knowledge professionals) to allow capturing of the expert's knowledge for codification into a
knowledge model that can then be encoded into a knowledge base.
Downstream Function: A function that receives the target function’s work products.
Elicitation: The process of obtaining domain knowledge from experts through one of several elicitation
methods such as interviews, observation, simulation, and so on.
Encoding: Encoding of knowledge involves translating codified knowledge models to a representation such as
that required for an expert system tool or shell. Encoding is similar to "programming", and may in many
instances include computer programming to augment tools or shells. Encoding may fully be a programming
task as when an expert system is directly implemented in LISP Prolog, or another computer language.
Episode: A relatively independent incident or scene that occurs in the context of a larger situation -- a script or
story line -- and as such episodes have meaning. An episode is the collection of distinct steps that we observe
as the situation unfolds. We may choose to divide a situation into many episodes depending on which detail
we wish to work with. Or episodes may be relatively aggregate entities consisting of several events.
Event: An isolated occurrence within a particular situation. Events are concrete and detailed -- the numerous
distinct steps that occur as a situation unfolds. Events are normally observable and are typically, by
themselves, without context and meaning.
Expert System: A knowledge-based computer program containing expert domain knowledge about objects,
events, situations, and courses of action that emulates the reasoning process of human experts in the particular
domain. The components of an expert system include: 1. The Knowledge Base; 2. Inference Engine; and 3.
User Interface. Types of expert systems include rule-based systems and model-based systems.
Explicit Knowledge: Knowledge that “is not tacit or implicit” that is, it has been made available for inspection
by being explicated through oral or written language, expert system rules, computer programs, diagrams, or in
any other manner.
Forward Chaining: A search technique used in production (i.e. "if-then" rule) systems that begins with the
condition clause of a rule and works "forward" through a chain of rules in an attempt to activate implied action
rules. (Also termed "data-driven reasoning" or "bottom-up search.") During forward chaining, the inference
engine searches for if-condition matches in other rules in the knowledgebase when new values are generated
by then-action in rules that have been "fired."
Fuzzy Logic: A formal type of logic that is defined to work with fuzzy operations.
Fuzzy Reasoning: A reasoning method that is based on fuzzy logic. It is similar to Qualitative Reasoning.
Fuzzy Systems: Knowledge-based systems that employ fuzzy reasoning.
Implicit Knowledge: Knowledge that is contained implicitly in oral or written language, actions (also when
videotaped or provided as part of a hyper-media system), trained neural networks, embedded in technology,
culture, practices, and so on.
Inductive Reasoning: Reasoning to generate hypotheses based on background or domain knowledge and
information such as premises, statements, or facts. Example: Premise: "The engine is powerful. " Background
knowledge: "Engine is part of a car. " Hypothesis: "The car is powerful." Induction can also be used to
generate hypotheses from background knowledge and other hypotheses. Rules are often used to perform
inductive inference.
Inference Engine: The component of a computerized knowledge-based system that controls its reasoning
operation by selecting which rules to use, accessing and executing those rules, and determining when an
412 Knowledge Management Foundations:
Thinking About Thinking -- How We Create, Represent, and Use Knowledge in People and Organizations

acceptable solution has been found. This component is sometimes called the "control structure" or the "rule
interpreter."
Information: Information describes a particular circumstance or case. Information consists of facts or data and
may take on any one of several forms, levels of abstractions, and degrees of certainties. Information is used by
knowledge to interpret or reason about a particular circumstance or case.
Knowledge: Many relevant definitions:
A. Formal Language Use Definition:1 1. Cognizance; 2 a (1): The fact or condition of knowing something
with familiarity gained through experience or association; (2): acquaintance with or understanding of a
science, art or technique; b (1): the fact or condition of being aware of something; (2): The range of one’s
information or understanding; c: The circumstance or condition of apprehending truth or fact: Cognition; d:
The fact or condition of having information or of being learned; 4 a: The sum of what is known; the body of
truth, information, and principles acquired by mankind.
B. Epistemological Definition:
The body of internalized data, concepts, perspectives, judgments, strategies, and so on, that a person believes
to be true.
C. Operational Definition for this book:
Truths, perspectives, judgments, and methodologies that are available to handle specific situations.
Knowledge is used to interpret information about a particular circumstance or case to handle the situation.
Knowledge is about what the facts and information means in the context of the situation.
Knowledge about Knowledge: Understanding what knowledge is about; how it is created, used, and structured
-- as studied by the field of epistemology (also see Meta Knowledge).
Knowledge Base (KB): The component of a knowledge-based system that contains the system's domain
knowledge in some representation suitable for the system to reason with. Knowledge in knowledge bases is
typically represented in a standard format.
Knowledge-Based System (KBS): A computer-based system that contains explicit domain knowledge used
specifically for reasoning about specific situations. An expert system is a special kind of KBS.
Knowledge Engineer: Specialists responsible for analyzing knowledge-intensive functions to design
appropriate Knowledge Management Activities such as technical development of a knowledge-based system.
Knowledge Engineers may be "Knowledge Technologists" focusing on the content and functionality of
knowledge use in a knowledge-based function or "AI Technologists" focusing on implementation of a
knowledge-based system. Only rarely is a Knowledge Engineer both an AI Technologist and a Knowledge
Technologist.
Knowledge Engineering: The professional activities associated with eliciting (or acquiring), codifying, and
encoding knowledge, conceptualizing- and implementing knowledge-based systems, and engaging in activities
to formalize knowledge and its use -- particularly through application of artificial intelligence.
Knowledge Holder: The person (domain expert) who holds the knowledge of interest. Knowledge holders can
behave in different ways and can be classified as a: "Professional Practitioner;" "Practical Knowledge-
worker;" "Performer;" or "Communicating Negotiator."
Knowledge Management: The field of deliberately and systematically analyzing, synthesizing, assessing, and
implementing knowledge-related changes to attain a set of objectives.
Knowledge Management Activity: Distinct knowledge-related changes to manage knowledge.
Knowledge Model: Knowledge models take many forms. They may be documentation of domain knowledge
on paper, in computer-based knowledge base, or videotaped “show-and-tell” for performing a particular task.
Knowledge models may be represented using a formal “knowledge representation,” it may be in natural
language as a narrative, a set of diagrammatic representations, and so forth.
Knowledge Professional: A professional who focuses on optimal creation, organization, availability, and use of
knowledge in a domain or within a business function. Knowledge professionals have applied understanding of
task environment analysis, various KM approaches, business use of knowledge, and support of knowledge-
workers with automated reasoning and other means. Knowledge professionals may be trained in cognitive
sciences, artificial intelligence, philosophy, and management sciences.
Knowledge Representation: The formal structures used to store information in a knowledge base in a form that

1 Webster’s Ninth New Collegiate Dictionary.

Appendix B. Glossary 413

supports the reasoning approach to be employed. Knowledge representation techniques include "production
rules" ("if-then rules"), logic (often "first order logic"), semantic networks, frames, and scripts.
Knowledge Technologist: A professional who focuses on codification and automation of knowledge content in
a domain. The knowledge technologist must have applied understanding of knowledge elicitation, analysis,
and modeling, and support of knowledge-workers with automated reasoning. Knowledge technologists may
be trained in cognitive sciences or artificial intelligence.
Knowledge Technology: Technology -- physical and methodological -- for support of KM activities.
Knowledge-worker: Individual who makes her/his contributions through exercising of intellectual expertise and
understanding.
Logic: A technique for drawing inferences that relies on formal rules for manipulating symbols. Logic is a
branch of philosophy. Symbolic logic is also considered a branch of mathematics.
Machine Learning: An area of AI research that investigates techniques for creating computer programs that
can learn from their own experience.
Machine Translation: An area of AI research that attempts to use computers to translate text from one
language to another. Machine translation programs often use combinations of natural language understanding
and natural language generation techniques.
Menu-Based Natural Language: An approach to natural language understanding in which the computer helps
build a natural language sentence by presenting "menus" (options lists) of choices that are available in each
context and allowing the user to select the options that meet the user's requirements.
Meta Knowledge: Knowledge about knowledge (in contrast to knowledge about things in the world).
Meta Reasoning: Allows a person (or an inanimate system) to know what it knows -- and what it does not
know.
Model-Based Expert System: A type of expert system, usually intended for diagnostic purposes, which is
based on a model of the structure and behavior of the device or system it is designed to "understand."
Model-Based Reasoning: Complex reasoning strategies that allow the use of mathematical models as
representations of the domain knowledge.
Natural Language: A language in common use by people to communicate among themselves (Example:
English).
Natural Language Generation: The part of natural language-processing research that attempts to have
computers present information to their users in a natural language.
Natural Language Interface (NLI): A computer program that allows the user to communicate with a computer
in a natural language. An NLI may incorporate both natural language-understanding and natural language-
generation capabilities. An NLI is sometimes called a "natural language front end".
Natural Language Processing: An area of AI research that allows computers to use a natural language.
Natural language processing is divided into natural language understanding and natural language generation.
Natural Language Understanding: The part of natural language-processing research that investigates methods
of allowing computers to understand a natural language.
Neural Nets: A family of reasoning strategies and knowledge representations that are patterned on the neural
architecture of the brain. Neural nets often consist of a large number of nodes connected by links that transmit
signals. Neural nets must be "trained" using examples to modify the strength of the couplings between nodes
to change the net's reasoning behavior. Neural nets are used in a number of applications where the knowledge
is amorphous and ill understood, like handwriting interpretation, seismic data interpretation, and so on.
Nonmonotonic Reasoning: A reasoning method that allows retraction of hypotheses, conclusions, or facts given
new (and better) information or understanding. Also often supports multiple lines of reasoning (multiple
hypothesis reasoning). Nonmonotonic reasoning is useful where knowledge is not well understood or
information is unreliable.
Numeric Processing: The traditional use of computers to manipulate numbers.
Object Oriented System: A system built around "objects" that are independent computer procedures that
perform one of its operations when passed a message. Object oriented systems also employ "inheritance" of
characteristics, and "encapsulation." Most KBS tools and shells are implemented as object-oriented systems.
Pattern-Matching: An AI technique that recognizes similarities between patterns and objects or events.
414 Knowledge Management Foundations:
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Planning and Decision Support: An area of AI research that applies AI techniques to planning and Decision-
Making processes, primarily to assist managers who have Decision-Making responsibilities.
Planning Systems: A type of AI-based systems used to reason about sequential situations such as scheduling,
resolution of time conflicts, and so on. Planning systems may use nonmonotonic reasoning.
Predicate Calculus: A formalization of classical logic that uses clauses of functions and predicates to describe
relations between individual entities or symbols.
Procedural Knowledge: Knowledge and information about courses of action that may be sequential in nature.
Production Rule: A rule in the form of an "if-then" or "condition-action" statement often used in the
knowledge base of an expert system. A production rule typically represents a single heuristic. The If
(Condition) is called the "antecedent" and the Then (Action) is called the "consequent."
Production System: A knowledge-based system that relies on a reasoning approach that uses knowledge
representation in the form of production rules. Production systems consist of a rule-base, an inference engine,
and a user interface.
Proficiency: Capability to perform.
Qualitative Reasoning: A reasoning method that is based on qualitative relations. Example: Background
Knowledge: “All attractive products while priced slightly high will sell well.” Premise: “The present
product is very attractive and priced slightly high.” Conclusion: “The present product will sell very well.”
Routine: A regular, often unvarying procedure for what to expect and how to handle a specific kind of situation.
A routine is detailed, concrete, and inflexible. It consists of numerous and relatively deterministic, rigid steps
that might cover many of the tasks in the process. Other tasks may still require explicit reasoning (they are
still part of the script that underlies the routine).
Rule: See "Production Rule."
Rule-Based Knowledge-Based Systems: A type of knowledge-based system where the domain knowledge is
represented in the form of production rules.
Schema: A broad and conceptual plan or scheme for a class of situations. Schemas are concepts or mental
models by which a static or dynamic situation can be characterized and understood. Schemas are typically
abstract models of a generalized situation. Scripts -- often several -- can be generated from schemas to form
more definite expectations for evolutions of specific situations. It is a generalized concept that defines our
understanding of the underlying structure, nature, or principles of a general type of story, situation , or
“system.”
“A spatially and/or temporarily organized structure in which the parts are connected on the basis of
contiguities that have been experienced in space or time. A schema is formed on the basis of past experience
with objects, scenes, or events and consists of a set of (usually nonconscious) expectations about what things
look like and/or the order in which they occur. The parts, or units, of a schema consists of a set of variables,
or slots, which can be filled, or instantiated, in any given instance by values that have greater or lesser degrees
of probability of occurrence attached to them. Schema vary greatly in their degree of generality -- the more
general the schema, the less specified, or the less predictable, are the values that satisfy them.”
(Adapted from Mandler (1979, p. 263)
Script: A general event sequence that underlies a referenced type of situation. Scripts are flexible, somewhat
abstract, and include general expectations and directions. Typically, scripts consist of several steps made up of
episodes and events.
Scripts are in many ways similar to routines. The main difference is that scripts and their steps are
general, broad, and flexible compared to the routines’ specific and unvarying steps. Accordingly, hiring
scripts, for example, may cover a range of positions -- not only competent professionals as covered by a
routine.
Technologically: A technique for representing knowledge that stores in a series of "slots" the events and
expectations for situations that evolve over time.
Semantic Network: A knowledge representation method for representing associations between objects using a
network of nodes with arcs between the nodes. The nodes represent objects (or events or concepts) and the
arcs represent the relations between the objects.
Speech Recognition: Techniques that allow computers to recognize words and phrases of human speech.
Speech Synthesis: Techniques that allow speech generation by a computer.
Symbolic Processing: Symbolic processing is the basis of AI programming. It uses computers to manipulate
Appendix B. Glossary 415

symbols, in contrast to conventional numeric processing.

Symbolic Reasoning: The use of symbolic processing to solve reasoning problems using strategies and
heuristics to manipulate the symbols.
System: A group of objects that interact partially or completely with each other.
Tacit Knowledge: Knowledge that a person does not make explicit. Tacit knowledge may be inaccessible to
conscious recall and reasoning because it: (1) Is not well understood; or (2) Is highly routinized and automatic
and has transgressed the recall barrier.
Text Understanding: The area of natural language understanding that allows computers to recognize the
content of written text.
Thinking about Thinking: Being consciously able to engage in meta reasoning and understand mental
processes such as strategies and models.
Upstream Function: A function that supplies the target function with work products.
User Interface: The facility of a knowledge-based system that supports bi-directional communication between
the system and its user. Most user interfaces use natural language-processing techniques and bit-mapped
graphics.
Index
anthropology,  27  
Anticipate,  40  
A   Applied  artificial  intelligence,  26,  28  
Applying  knowledge,  57,  58  
A  schematic  illustration  of  the  networking  that  took   approximate  knowledge,  98  
place  at  PotCo  is  provided  in  Figure  9-­‐1,  which  also   APPROXIMATE  REASONING,  253  
shows  the  roles  of  each  network  participant.    The     arbitrary  biases,  91  
initial    networking    was    between    the    owner    of     arbitrary  decisions,  93  
the    problem      (Chet)      and      his,  360   Arbitrary-­Alternatives  Decision-­Making,  328  
abduction,  244   Arbitraryness,  91  
Abductive  reasoning,  243   Areas of Knowledge,  172  
Abductive  reasoning  example,  244   Argument  strength,  272  
Ability  to  Apply  Knowledge,  25   Arthur  D.  Little,  Inc.,  xv  
ability  to  explain,  111   articulatory  loop,  83  
ability  to  recall,  88   Assess  Value  of  Knowledge,  379  
Abstract  concepts,  160,  162,  164   Assimilators,  199  
Abstract  dynamic  reasoning,  261   associations,  86,  104,  138,  271  
abstract  frameworks,  93   associative  links,  87  
abstract  generalizations,  116   Associative  Network,  105  
ABSTRACT  KNOWLEDGE,  163   associative  networks,  107,  174  
abstract  knowledge  models,  144   Associative  reasoning,  246  
abstract  mental  models,  127,  244   assumptions  in  decision-­‐making,  279  
abstract  mental  objects,  102   attention  level,  81  
abstract  models,  86   Automate  Knowledge,  382  
abstract  representations,  86   automated  knowledge,  83  
abstract  thoughts,  86   Automated  Reasoning  Systems,  267  
Abstraction  Strata,  125   Automatic  Decision  Making,  326  
Accommodaters,  199   AUTOMATIC KNOWLEDGE,  70,  110,  115,  123,  187  
Acknowledgments,  xi   Automatic  Knowledge,  119,  123  
Acquire  knowledge,  38   AUTOMATING  KNOWLEDGE,  107  
Acquiring  knowledge,  184   Availability  heuristics,  248  
Acting  Intelligently,  34   Available  Information,  348  
acting  out,  85   avoiding  pain,  237  
active  agents,  67,  76  
active  knowledge,  10  
Ad  Hoc  Coworker  Teaming,  363   B  
Adding  knowledge,  184  
Advanced Beginner,  72,  107,  147   Baddeley,  A.,  83  
Aertsen,  Ad,  79   Basic  knowledge,  36,  126,  127  
Affiliative  decision  Factors,  340   Basic  Learning  Styles,  198  
AI,  26   basic  principles  and  decision  quality,  315  
amount  of  knowledge,  127   basic  skills,  126  
ANALOGICAL  REASONING,  245   Beginner,  72,  107,  147  
analogies,  106   behavior  and  knowledge,  221  
ANALYSIS,  280   behavioral  traits,  34  
analysis  paralysis,  313   Beliefs,  138  
Analysis,  daily  life,  281   beliefs  in  decision-­‐making,  279  
Analytical  Learners,  199   BENEFITS,  273  
Analyze  Knowledge,  381   benefits  from  knolwedge,  6  
Analyzing,  278   Biases,  91  
Anderson,  John  R.,  209,  218,  246   Binet,  A.,  77  
Anecdotal Knowledge,  140   BLACKBOARDS,  265  

416
Index 417

Boden,  Margaret,  306,  308,  311   codified  knowledge,  10,  67  

Böhme,  Gernot,  22   Codified  knowledge  models,  176  
Bonhoeffer,  Tobias,  79   Codify  Knowledge,  381  
Boodman,  David,  xi   cognitions,  86  
Book  knowledge,  10   Cognitive  Aspects,  78  
Booz,  Allen  &  Hamilton,  Inc.,  322   Cognitive  decision  Factors,  340  
bottom-­‐up  generalization,  114   cognitive  functions,  78  
bottom-­‐up  learning,  204   cognitive  perspective,  11  
bottom-­‐up  problem-­‐solving,  297   Cognitive  Reluctance,  273  
bracketed  state  vectors,  160   Cognitive  science,  78  
brackets,  99,  161,  254   cognitive  styles,  128  
breadth-­‐first  search,  268   collaborating  teams,  351  
broad-­‐mindedness,  183   collaboration,  7,  357,  358,  362,  368  
Brown,  John  Seely,  186   Collaboration  conditions,  367  
buffer  memory,  79,  84   Collaborative  team  work,  369  
build  consensus,  40   collaborative  teams,  300  
BUILDING  Knowledge,  55   collaborative  work,  358  
business  administration,  28   collective  work-­‐products,  363  
Business  Environments,  21   COMBINING  KNOWN  ENTITIES,  310  
Business  Week,  4   Committees,  363  
Common  knowledge,  133  
Common  Sense  Learners,  199  
C   COMMONSENSE  REASONING,  239,  263  
Communicating  Negotiators,  129,  131  
CAD,  68   COMPETENCE  KNOWLEDGE,  110  
capabilities  to  perform,  65   Competent Performer,  72,  108,  147  
capability  to  act  intelligently,  69   Compiled  knowledge,  83  
CAPABILITY  TO  CARRY  IT  OUT,  372   COMPILING  knowledge,  107  
capability  to  explain,  108   Completeness,  96  
Caplan,  Janet,  45   complex  abstractions,  102  
capricious  biases,  91   complex  episodes,  86  
Capriciousness,  91   complex  processes,  93  
case-­‐based  reasoning,  247,  249,  252   Complex  Processing  Path  example,  236  
Case-­Based  Reasoning  Situations,  250   complex  reasoning,  256  
categorizations,  86   Complex  Reasoning  Approaches,  259  
categorize,  42   complex  reasoning  tools,  267  
Categorize  Knowledge,  381   Complicating  factors,  256  
categorizing  knowledge,  145   computer-­‐aided  design,  68  
causal  chains,  98,  163   computer-­‐aided-­‐instruction,  197  
Causal  Event  Chains,  261,  267   computers,  266  
causal  systems,  262   Concept  Hierarchies,  166,  174  
Cause-­and-­Effect,  111,  261   concept  hierarchy,  102,  168  
cause-­‐and-­‐effect  processes,  99   Concept  Relatedness,  105,  174  
CBR,  249   Concept  Relationship,  105  
central-­executive  function,  83   Concepts,  138  
Certainty,  99   Conceptual,  70  
chains  of  events,  85   conceptual  associations,  244  
Changing  of  Beliefs,  206   Conceptual  chunking,  102  
Chaparral  Steel,  231,  399   conceptual  knowledge,  11,  137,  138  
characterizing  knowledge,  173   CONCEPTUAL  KNOWLEDGE  LEVEL  Dimension,  70  
chemical  changes,  82   Conceptual  Knowledge  Levels,  118,  121,  125,  155,  
CHOICE  SELECTION,  317   183  
chunking  hierarchy,  102,  106   Conceptual  knowledge  levels  and  learning,  207  
chunking  levels,  102   Conceptual  memory,  85  
chunks,  82   conceptual  priming,  87  
CKF  characteristics,  60   conceptual  reasoning,  266  
CKFs,  59   concrete  knowledge,  116  
classificatory  functions,  81   concreteness,  113  
Clerical  routines,  324   Confirmed  Data,  138  
clerical  work,  302   Confirming  prior  knowledge,  206  
Cleveland,  Harlan,  22,  78   congruence,  95  
codification  of  abstract  concepts,  163   Congruency,  97  
418 Knowledge Management Foundations:
Thinking About Thinking -- How We Create, Represent, and Use Knowledge in People and Organizations

Connectedness,  96   Decision  Support  System,  264  

conscious  level,  81   Decision-­making,  275,  288,  312  
conscious  reasoning,  108   Decision-­Making  Characteristics,  349  
conscious  self,  81   Decision-­‐making  factor,  affiliative,  340  
Conscious  working  memory,  83,  88   Decision-­‐making  factor,  egocentric,  340  
consequences,  43   Decision-­‐making  factor,  self-­‐serving,  340  
Contents,  iii   Decision-­‐making  factors,  cognitive,  340  
context-­‐dependent  cues,  88   Decision-­‐making  factors,  facilitating,  342  
CONTRARIAN  VIEW,  351   Decision-­‐making  factors,  situational,  339  
conventional  organization,  230   Decision-­Making  knowledge,  119,  123  
Convergers,  199   decision-­‐making  level,  353  
Conviction,  373   Decision-­Making  Practices,  351  
CONVICTION  IN  DECISION-­‐MAKING,  342   Decision-­Making  Process,  313  
Cooperation,  358   DECISION-­‐MAKING  STYLES,  325  
Coordinate,  40   Decision-­‐making,  hidden  costs,  353  
Coordination,  358   DECISIONS,  35,  43,  172  
Coping  strategies,  256,  326   Decisions  by  Rote,  326  
Core  Competencies,  396   declarations,  138,  158  
corporate  culture,  227   declarative  knowledge,  158  
Corporate  Memory  System,  196   DEDUCTIVE  REASONING,  240  
CORPORATE  RELEARNING,  226   deep  knowledge,  116,  182  
CORPORATE  STRUCTURE,  14   DEFENSIVE  AVOIDANCE,  342  
corporate-­‐wide  memory  systems,  217   Deming,  W.  Edwards,  xiii,  46,  191  
cortex,  87   depth-­‐first  search,  268  
Costs  of  Making  Decisions,  355   derived  mental  objects,  138  
Cox,  Earl,  256   DESIGN,  280,  282  
creative,  42   deterministic  reasoning,  241  
CREATIVE  DECISION-­‐MAKING,  317,  318   developing  abstractions,  114  
Creative  decisions,  345   Developing  Judgments,  268  
Creative  Exploration,  290   Devices,  71  
creative  notions,  244   DIAGNOSIS,  280  
Creative  Phases,  308   Dialog,  264  
creative  process,  308   Digital  Equipment  Corporation,  394,  396  
Creative  reasoning,  239   Digital  Equipment  Corporation  can  be  used  as  a  model  
CREATIVITY,  186,  308   for  how  knowledge  can  be  managed  effectively  
Creativity  and  knowledge,  311   from  a  technical  perspective.    Other  organizations,  
Creativity  and  reframing,  309   however,  have  decided  to  adopt  a  much  broader  
Crisis  Problem-­Solving,  284   perspective  and  pursue  KM  in  many  nontechnical  
Critical  Knowledge  Function,  386   ways  that  may  be  as  powerful  -­‐-­‐  if  not  more  
critical  knowledge  functions,  20,  59   powerful  -­‐-­‐  than  automating  knowledge  bases  and  
critical  success  factors,  6   reasoning.,  401  
Critical  Thinking,  291,  296   Direct  Implanting  of  Knowledge,  190  
cues,  87   direction  of  thinking,  237  
Cultural Themes,  172   Discrete  State  Brackets,  161  
Customer  service  example,  167   discrete  states,  161  
Customer  service  representative,  4   discrete  symbolic  categories,  254  
customer  service  representatives,  167   Discriminate,  42  
cybernetics,  28   distrusts,  271  
Divergers,  198  
do  more  with  less,  6  
D   Do  More  with  Less!,  5  
Document Summarizing,  267  
daily  life  analysis,  281   Doers,  198  
Data,  70   Dominant-­Factor  Decision-­Making,  329  
Data,  74   Dominant-­Hypothesis  Decision-­Making,  331  
data-­‐driven  reasoning,  241   Dominant-­‐hypothesis  reasoning,  258,  331  
De  Bono,  Edward,  277,  304,  306   dreaming,  234  
DEC,  396   Driving  forces  in  teams,  372  
Decision  Challenges,  319,  320,  321   Drucker,  Peter,  22  
Decision  factors,  343   Drucker,  Peter;  .i.Taylor,  Frederick,  xii  
Decision  Making  Issues,  351   DuPont,  394  
decision  shortcomings,  29   Dynamic  Learners,  199  
Index 419

Dynamic Programming,  267   explicit  reasoning,  81,  98,  235  

DYNAMIC  REASONING,  260   explicit  work  goals,  237  
Dynamic  Situations,  111   explicit-­‐to-­‐explicit  knowledge  flow,  214  
explicit-­‐to-­‐tacit  knowledge  flow,  213  
Exploratory  Problem-­Solving,  289  
E   Explore  Knowledge,  379  
Explore  Knowledge,  381  
economics,  28   external  knowledge,  67  
Edison,  Thomas,  308  
EDUCATE,  223  
education,  197   F  
Education,  76  
Education  vs.  training,  223   FACILITATING  DECISION  FACTORS,  342  
Effective  KM,  23   facts,  102,  138  
effective  outcome-­‐oriented  thinking,  304   Factual  Knowledge,  11,  119,  123,  137,  138  
EFFECTIVE  PROBLEM-­‐SOLVING,  299   fallible  heuristics,  248  
Effective  reframing,  306,  307   false  belief,  91  
Effective  Teaching  model,  208,  211   false  negative,  258  
Effective  Teaching  Model  example,  209   false  positive,  258  
EFFECTIVENESS  OF  DECISION-­‐MAKING,  347   Falsehoods,  91  
EFFICIENCY  OF  LEARNING,  214   Fantasy,  92  
effortless  decision,  312   fast  learner,  33  
Egocentric  decision  factors,  340   Federal  Express  Corporation,  397  
Einstein,  Albert,  257,  352   feelings,  138  
Embedded  knowledge,  10,  68,  107,  140   Feigenbaum,  Edward,  26  
embedded  technology,  141   Figure  1-­4.    Three  Examples  of  How  .i.Knowledge  
encyclopedic  memory,  86,  87   Management  Expertise,  21  
End-­Value  Benefits,  262   Figure  4-­12.    Amount  of  Knowledge  Held  by  a  
enlightened  abduction,  244   Hypothetical  26  Year-­Old  Competent  
Enterprise  considerations,  8   Performer  with  College  and  3  Years  of  Practice.,  
Episode,  112   128  
Episodes,  111,  138,  156   Figure  4-­4.    Example  of  .i.Concept  Relatedness,  105  
episodes,  100   First Order Predicate Logic,  267  
Episodic  memory,  85   Fixed-­Idea  Decision-­Making,  328  
epistemology,  64   flexibility,  217  
Ernst,  Martin,  xi   flexible,  37  
erroneous  concepts,  139   Followership,  45  
erroneous  conclusions,  243   Ford  Motor  Company,  396  
Establishing  Associations,  272   Forgetting,  88  
ethnography,  27   Forms  of  knowledge,  132  
Etzoni,  334   FORTUNE,  25  
event  chains,  261   Fortune  50  companies,  xiii  
Event  Learning,  203   forward  chaining,  241  
events,  100,  111,  112,  156   four  conceptual  levels,  118  
Evolutionary  problem  solving,  289   Framework  for  knowledge  management,  375  
EXAMPLE,  13,  14,  15,  28,  32,  52,  167,  193   Framework  to  Manage  Knowledge,  378  
Example  knowledge  pooling,  221   Franklin,  Benjamin,  308  
Example  of  Knowledge-­Intensive  Task,  173   Freedman,  Evelyn,  209  
Expectational  knowledge,  137,  138   Full-­Time  Work  Teams,  363  
expectations,  102,  138   fundamental  management  function,  10  
expert,  108,  147   Fuzziness,  99  
Expert,  72   fuzzy  reasoning,  82,  255,  256  
expert  access  networks,  220  
Expert  learning  curve,  229  
Expert  Networks,  364   G  
expert’s  primary  role,  230  
Expertise,  71,  107,  146   game  against  active  adversaries,  163  
Expertise,  76   game  against  nature,  163  
Explicating  Tacit  Knowledge,  213   Gardner,  Howard,  136,  139,  248,  310  
Explicit  Declarations  Examples,  160   Garratt,  Bob,  33,  193  
explicit  knowledge,  65,  124,  140,  144,  158,  212   Garvin,  David,  397  
explicit  knowledge.,  10   Garvin,  David  A.,  231  
420 Knowledge Management Foundations:
Thinking About Thinking -- How We Create, Represent, and Use Knowledge in People and Organizations

general  discourse,  244   imagined  conclusion,  92  

general  understanding,  116   imagined  knowledge,  91  
generalized  understanding,  112   IMKA,  214,  217,  396  
generalizing  knowledge,  116   imperfect  information,  354  
generate-­‐and-­‐test,  244,  287,  292   imperfect  knowledge,  354  
Generic  View  of  Knowledge,  131   implicit  knowledge,  136,  140,  144,  213  
Gestalts,  138   IMPORTANCE  OF  DECISIONS,  351  
Gilhooly,  K.  J.,  234,  238,  296   IMPORTANT  KNOWLEDGE  AREAS,  13  
Glass,  Arnold,  306   imprecise  reasoning,  239  
Goal-­Directed  Reasoning,  268   incentives,  221,  227  
goals,  138   inconsistencies,  107  
GOAL-­SETTING,  11   Increasing  Proficiency,  111  
GOAL-SETTING knowledge,  70   Incremental  decision-­making,  332  
goal-­setting  knowledge,  110,  119   Incremental  Problem-­Solving,  289  
Goleman,  D.,  224   independent  thinking,  37  
Good  Decisions,  315   in-­‐depth  competence,  182  
GOOD  DECISIONS  ARE  CREATIVE,  345   indexing,  100  
good  listener,  37   INDIVIDUAL  WORK  STYLES,  373  
Grand Master,  72   Induced  conclusions,  243  
Grandmaster,  147   inductive  logic  chain,  244  
group  sessions,  373,  374   inductive  reasoning,  242  
groupthink,  340   Inefficient  learning,  214  
influencing,  272  
Information,  70  
H   Information,  74  
INFORMATION  Dimension,  70  
Halpern,  Diane,  238,  248,  278   Information Flows,  172  
Harbison-­‐Briggs,  Karan,  388   Information States,  70  
Harmon,  Paul,  26   information  transfer,  197  
Harvard  Business  Review,  216   informed,  39  
Hemispheric  dominance,  81   inherent  trait,  117  
Hertz,  David,  26   Inhibitors,  172  
hesitation,  273   in-­‐house  staff,  expertise  of,  223  
Heuristic  problem-­‐solving,  325   Initiative  for  Managing  Knowledge  Assets,  214,  217,  
Hidden  Costs,  353   396  
hidden  intellectual  tasks,  302   Innovating,  290  
Hidden  knowledge-­‐intensive  activities,  169   Innovation,  183,  186  
Hierchialization,  102   Innovation  factors,  184  
higher-­‐level  chunks,  102   innovative,  42  
highly  complex  reasoning  approaches,  266   Innovative  Learners,  198  
Hinton,  G.  E.,  74   insufficient  preparation,  313  
HOLDING  Knowledge,  56,  94   integrate  knowledge,  38  
holographic  management,  399   intellectual  property,  68  
Holyoak,  Keith,  306   Intelligence,  76  
how-­‐to  knowledge,  112   intelligent  behavior,  34,  77  
Human  Memory  System,  79,  81   Intelligent-­Acting,  8,  34,  277,  370  
Human  Resource  Management,  397   Intelligent-­‐acting  behavior,  34  
HYPERVIGILANT  Escape,  342   Intelligent-­‐acting  factors,  46  
hypothesis  disproving,  243   INTELLIGENT-­‐ACTING  ORGANIZATIONS,  223  
Intermediate Decisions,  321,  323  
internal  knowledge,  67  
I   internalization,  102  
Internalization  of  knowledge,  25  
icons,  86   INTERNALIZED  KNOWLEDGE,  117  
IDEAL  KNOWLEDGE  WORKER,  180   internalizing  knowledge,  99,  101,  186  
IDEALISTIC  Knowledge,  11,  70,  110,  119   INTERNALIZING  PERSONAL  KNOWLEDGE,  206  
ideaphoria,  311   interpersonal  relationships,  93  
ideographs,  86   Inter-­Team  Communication,  364  
if-­‐then  rules,  158   Intuition,  236,  325  
Ignorant,  72,  147   intuitive  conclusions,  244  
image  schemas,  106   Intuitive  Decision-­Making,  326  
imaginative,  42   intuitive  reasoning,  248  
Index 421

inventions,  32   knowledge  Constraint,  60  

Invest  effort,  40   Knowledge  Creation,  183  
irrational  biases,  91   KNOWLEDGE  DETAIL  Dimension,  73  
Irrationality,  91   Knowledge  detail  example,  152  
Knowledge  Details,  151  
Knowledge  development  side-­‐effects,  109  
J   Knowledge Domain,  73,  153  
Knowledge  Domains,  148  
Janins,  Irving,  323   Knowledge Element,  73  
Janis,  Irving,  238,  278,  304,  313,  335,  338,  339,  342   Knowledge  Elements,  154  
Johnson-­‐Laird,  Philip,  235,  238   Knowledge  Elicitation,  388  
joint  ventures,  32   knowledge  embedded,  10  
Judgment,  325   knowledge  engineering,  26  
judgments,  102,  135,  138,  268,  271   Knowledge  Flow  Analysis,  386  
JUDGMENTS,  93   knowledge  flow  dimensions,  191  
Knowledge  Flow  Models,  174  
Knowledge Flows,  172,  188,  191,  213,  225  
K   Knowledge  for  collaboration,  365  
knowledge  for  end-­user  consumption,  141  
KADS,  388   Knowledge  Forms,  174  
Kahneman,  Daniel,  248,  335  
Knowledge Fragment,  73  
Katzenbach,  Jon,  362,  372  
Knowledge  Fragments,  155  
KBS,  364,  389  
Knowledge  Hierarchy,  159  
KBS.,  15  
knowledge  holders,  129  
Keeney,  and  others),  Etzoni’s  script  captures  and  
Knowledge  holding,  55  
highlights  the  particular  nature  of  the  process  but  
Knowledge  HOW,  11,  135  
disregards  the  creative  aspects  of  the  analysis  and  
Knowledge  Inventory,  388  
synthesis  phases  for  generating  alternatives.,  335  
knowledge  investments,  26  
Keeney,  Ralph,  315  
Knowledge  Management,  12,  16  
Kelley,  Robert,  45  
Knowledge  Management  -­‐  introduction,  3  
Kelly,  Henry,  22  
Knowledge  Management  applications,  27  
King,  David,  26  
Knowledge  Management  Approaches,  383  
KISS,  257   Knowledge  Management  Concepts,  30  
KM  focus,  16  
Knowledge  Management  domain,  393  
KM  framework,  19  
Knowledge  Management  Experiences,  391  
KM  scope,  31  
Knowledge  Management  Expertise,  21  
know-­how,  110,  119,  135  
Knowledge  management  factors,  17  
Knowing HOW,  155   Knowledge  Management  Framework,  375  
Knowing THAT,  155   Knowledge  Management  key  areas,  23  
Knowing WHY,  155   Knowledge  management  methodologies,  19,  27  
Knowledge,  70,  71   Knowledge  Management  Methods,  389,  391  
Knowledge,  75   Knowledge  management  perspectives,  27  
knowledge  about  knowledge,  64,  126   KNOWLEDGE  MANAGEMENT  pillars,  17  
Knowledge  Acquisition,  388   Knowledge  Management  Practices,  394,  400  
Knowledge  and  behavior,  221   Knowledge  Management  Questions,  xiv  
Knowledge  and  creativity,  311   Knowledge  management  understanding  -­‐  need  for,  19  
KNOWLEDGE  AND  INFORMATION,  66   Knowledge  management’s  purpose,  8  
knowledge  architecture,  16,  382,  385   Knowledge  Measurement,  145  
Knowledge  asset,  7   KNOWLEDGE  MODELS,  70,  72  
Knowledge  assets,  23,  32,  135   knowledge  of,  136  
Knowledge  Assets,  10   Knowledge  of  knowledge,  36,  110  
Knowledge Atom,  73   Knowledge  Optimizing,  384,  398,  401  
Knowledge  Atoms,  155   knowledge  organization,  112  
Knowledge  Building,  183   Knowledge  perspective,  97  
Knowledge  Building.,  54   Knowledge  pooling,  56,  219  
knowledge  categorization,  145   Knowledge  pooling  example,  221  
Knowledge  characteristics,  95   Knowledge  profile  example,  150  
knowledge  characterization,  145   Knowledge  profiles,  148,  149,  150,  170,  171  
Knowledge  characterization  overview,  174   knowledge  profiling,  20,  387  
Knowledge  Charting,  384   Knowledge  purpose,  97  
knowledge  codification,  145   Knowledge Region,  73,  153  
knowledge  companies,  399   knowledge  required,  26  
422 Knowledge Management Foundations:
Thinking About Thinking -- How We Create, Represent, and Use Knowledge in People and Organizations

Knowledge  Requirements,  365   Learning  by  Analogy,  191  

Knowledge  Scripting,  165   Learning  by  Being  Told,  190  
Knowledge  Scripting  and  Profiling,  387   Learning  by  Deduction,  190  
Knowledge  Searches,  388   Learning  by  Induction,  190  
Knowledge Section,  73,  153   Learning  by  Instruction,  190  
Knowledge Segment,  73,  153   Learning  by  Observation  and  Discovery,  191  
Knowledge  Sharing,  364   Learning  costs,  221  
Knowledge  Shifts  Between  Cognitive  Levels,  125   learning  difficulties,  221  
Knowledge  Society,  xii   Learning  efficiency,  216  
Knowledge Span,  73   Learning  from  Examples,  191  
Knowledge  Spiral,  216   Learning  Issues,  221  
knowledge  survey,  8,  27   Learning  model,  188  
knowledge  surveys,  20,  385   learning  on-­‐the-­‐job,  93,  293  
Knowledge  THAT,  11   Learning  organization,  33,  225,  230,  397  
knowledge  transfer,  197,  218   learning  processes,  194,  200  
Knowledge  Types,  174   learning  resistance,  221  
Knowledge  use,  57   Learning  Strategies,  190  
Knowledge  Use  and  Requirements  Analysis,  170,  386,   learning  styles,  198  
398   Learning  Theory  Perspective,  188  
Knowledge  value,  26   Learning  Top-­Down,  204  
Knowledge  vs.  information,  xiii   left  hemisphere,  81  
Knowledge  vs.  information  confusion,  4   legitimate  decision  criteria,  339  
Knowledge  WHY,  11,  136   Leisurely  or  Unfocused  Exploration,  284  
knowledge,  a  generic  view,  131   Leonard-­‐Barton,  Dorothy,  399  
Knowledge,  ability  to  apply,  26   lessons-­‐learned,  194  
Knowledge,  business  role,  1   Lethargy,  273  
knowledge,  Business  use,  60   level  of  attention,  81  
Knowledge,  different  perspectives,  63   Level  of  Expertise,  347,  348  
knowledge,  value-­added,  61   levels  of  consciousness,  81  
knowledgeable,  306   Levels  of  Proficiency,  349  
KNOWLEDGE-­‐BASED  SYSTEM,  15   leverageable  knowledge,  141  
knowledge-­‐based  systems,  10,  267,  364,  389   Lewicki,  Pawel,  91  
KNOWLEDGE-­‐BUILDING  NETWORKING,  359   Lexical  memory,  86  
Knowledge-­Building  Practices,  221   life  stages,  229  
knowledge-­‐building  processes,  203   limited  relevance,  106  
KNOWLEDGE-­‐CREATION  PROCESSES,  200   Littler,  Craig,  xii  
knowledge-­‐intensive  activities,  20,  59,  164,  165,  166,   long-­‐term  memory,  79,  84  
297   long-­‐term  potentiation,  79  
knowledge-­‐intensive  scripts,  166   LTP,  79  
Knowledge-­‐Intensive  Steps,  166  
Knowledge-Intensive Tasks,  172  
Knowledge-­Intensive  Work,  166,  302   M  
Knowledge-­‐related  activities,  24,  381,  382,  387  
KNOWLEDGE-­‐RELATED  CONCEPTS,  74   machine  learning,  243  
knowledge-­‐related  dimensions,  63,  68,  69   Machines,  71  
Knowledge-Related Factors,  184   Major Decisions,  321,  323  
Known  Causal  Chains,  138   management  information  systems,  324  
KURA,  170   management practices,  172  
Management  science  approaches,  324  
management  sciences,  28  
L   managing  knowledge  value,  26  
Mandler,  J.  M.,  157  
lack  of  knowledge,  271   MANIFESTATION  Dimension,  71  
language  processing,  81   manifestations  of  knowledge,  65,  139  
language-­‐based  representations,  106   manipulation,  272  
language-­‐free  concepts,  87   Mann,  Leon,  313,  338,  342  
lateral  thinking,  304,  306   Markov  processes,  99  
Leadership,  45   Master,  72,  109,  147  
learn,  33   Mathematical Programming,  267,  293  
Learning,  179,  183,  188   mathematics,  266  
Learning  and  conceptual  knowledge  levels,  207   McBride,  Kirsten,  xi  
Learning  bottom-­‐up,  205   McGraw,  Karen,  388  
Index 423

meaning,  239   noncongruence,  95  

Means-­ends  analysis,  292   nonconscious  reasoning,  91  
MEDIUM-­‐TERM  MEMORY,  84   nonconsciously,  81  
memorable  experiences,  195   nondeclarative  knowledge,  158  
Memory  retention  time,  79   nondeclarative  memory,  90  
mental  effort,  273   nonmonitored  learning  situations,  93  
Mental  Laziness,  273   NONMONOTONIC  REASONING,  262  
mental  model,  139   NONOPERATIONAL  KNOWLEDGE,  67,  68  
Mental  Models,  106,  164,  234,  269,  271   Nonprogrammed  Decisions,  325  
mental  objects,  79,  85   Nonroutine  problems,  360  
mental  picture  assembly,  164   not  invented  here,  227  
meta-­‐knowledge,  64,  219   numerical  abilities,  81  
meta-­‐models,  138  
Metaphoric  Reasoning,  247  
metaphorizing,  247   O  
metaphors,  106  
meta-­strategy,  163   object  manipulation  cycle,  82  
Methodological  knowledge,  137,  138   objectives,  138  
Miller,  Geaorge  A.,  102   Observable  knowledge-­‐intensive  activities,  169  
Miller,  George  A.,  82   Occam’s  Razor,  352  
Mini-­Strategies,  292   Occam’s  Razor;  .i.KISS;  .i.,  257  
Minor Decisions,  321,  322   Ojha,  Helen,  xi  
Minsky,  Marvin,  74   Ojha,  Ishwer,  77  
MISCONCEPTIONS,  93,  107,  139   one-­‐way  communication,  188  
Mixed Integer Programming,  267   ON-­‐THE-­‐JOB  PROBLEM-­‐SOLVING,  293  
Mixed  problem-­‐solving,  299   Operational  Definitions  for  Knowledge,  65  
Mixed-­Scanning  Decision-­Making,  333   Operational  Definitions  of  Knowledge,  70  
Model,  knowledge  building,  51   operational  familiarity,  116  
Model,  knowledge  use,  51   operational  knowledge,  66  
MODEL-­‐BASED  REASONING,  252   Operational  knowledge,,  67  
Models  for  Outcome-­Oriented  Work,  301   operational practices,  172  
Monte Carlo Simulation,  267   OPINIONS,  93  
most-­‐important  factor  reasoning,  259   Organization  of  Knowledge,  94  
Motivational Factors,  184   organizational  learning,  193  
motor  systems,  81   ORGANIZATIONAL  OUTCOME-­‐ORIENTED  WORK,  297  
mulling  it  over,  100   Organizational  savvy,  45  
mulling  over,  185,  235,  373   Organize  Knowledge,  382  
multi-­‐attribute  utility  theory,  316   Organizing  knowledge,  94  
multi-­‐disciplinary  activity,  28   outcome-­‐oriented  activities,  276,  302  
multi-­‐disciplinary  team,  299   outcome-­‐oriented  thinking,  276,  297  
Multiple  Objectives  decision-­making,  315   Outcome-­‐oriented  thinking  paradigms,  282,  283  
Musical  ability,  81   outcome-­‐oriented  thinking  schema,  277  
outcome-­‐oriented  work,  297,  300  
outdated  experts,  228  
N   outdated  knowledge,  109  
OUTSIDE  EXPERTISE,  222  
naive  physics,  136   Outstanding  teams,  372  
Narrow-­‐  vs.  broad-­‐mindedness,  183   OVEREDUCATION,  231  
Narrow-­‐mindedness,  182  
native  intelligence,  77  
Natural  Language,  175   P  
natural language understanding,  267  
Negative  Judgments,  271   pain,  237  
Network,  45   Paradigm  knowledge,  119  
Networking,  358   paradigm  shift,  221,  303  
neural  connections,  82   paradigms,  309  
neural  nets,  74   PARADIGMS  FOR  OUTCOME-­‐ORIENTED  THINKING,  282  
neurotransmitters,  82   parochial  goals,  298  
Nicklaus,  Jack,  215   PASSION,  372  
no-­‐brainer,  326   Passive  Decision  Makers,  317  
no-­‐brainers,  324   passive  knowledge,  68  
Nonaka,  Ikujiro,  216   passive,  knowledge,  10  
424 Knowledge Management Foundations:
Thinking About Thinking -- How We Create, Represent, and Use Knowledge in People and Organizations

patents,  135   PROCEDURAL  knowledge,  107,  140  

Pathways,  70   Procedural  memory,  85  
pattern  matching,  246   proceduralized  knowledge,  107  
PATTERN  RECOGNITION,  246   procrastination,  273  
pattern-­‐matching,  118   producer  durables  investments,  22  
Peirce's  abduction,  243   Professional  Practitioners,  129  
perceptual  priming,  87   proficiency,  69,  146  
PERFORMANCE  KNOWLEDGE,  110   Proficiency,  75  
Performers,  129,  130   PROFICIENCY  Dimension,  72  
persistence,  37   Proficiency Levels,  72,  147  
personal  beliefs,  270   Proficient Performer,  72,  108,  147  
personal  characteristics  profiles,  171   Profiles  of  knowledge,  148  
personal  goals,  237   Programmed  Decisions,  324  
Personal  Knowledge,  132   Project  Teams,  363  
personal  knowledge-­‐building  processes,  200   proposition  schemas,  106  
Personal  Learning,  196,  200   PROPRIETARY  KNOWLEDGE,  15  
PERSONALITY TRAITS,  35,  36   Proprietary  Knowledge  Assets,  134  
Perspective,  45   proxy  beliefs,  237,  268,  269  
Perspectives,  138   Proxy  beliefs  in  problem-­‐solving,  279  
phonological  loop,  83   psychological  cost,  222  
physical  dynamic  reasoning,  261   PSYCHOLOGICAL  COSTS,  273  
Pillars  of  Knowledge  Management,  380   Public  Knowledge,  132  
pinball  machine  model,  82   Public  knowledge,  133  
PLANNING,  263   purposeful  activities,  276  
Planning  ahead,  264  
pleasure,  237  
Poincaré,  Henri,  309   Q  
Poincaré’s  four  creative  phases;,  309  
Polanyi,  Michael,  67   Qualitative  Knowledge,  98,  112,  136  
Policy Decisions,  321,  323   Qualitative  Opinions,  99  
POOLING  Knowledge,  57   qualitative  reasoning,  82,  253,  254  
pooling  of  knowledge,  219   qualitative  relationships,  255  
portfolio  manager  knowledge,  151   Qualitative  Values,  99  
Positive  Judgments,  271   QUALITY  DECISIONS,  314,  347  
Posner,  Michael,  81   Quality  of,  347  
postures,  34   Quality  of  Knowledge  Work,  348  
Practical  Considerations,  377   questions  about  knowledge,  65  
practical  knowledge,  115  
practical  knowledge  workers,  88,  129,  130  
Practice  requirements  for  expertise,  117   R  
PRAGMATIC  Knowledge,  11,  70,  110,  123,  187  
Pragmatic  Knowledge,  119   R&D,  28,  32  
precise  reasoning,  238   R&D  programs,  15  
PREPARED,  38   Raiffa,  Howard,  315,  335  
preparedness,  34,  35   RATIONAL  DECISION-­‐MAKING,  339  
Priming,  87,  115,  117   Rauch-­‐Hindin,  Wendy,  26  
Priming  memory,  87,  108,  251   Reality,  92  
principled,  37   Reason  rationally,  43  
priorities,  44   Reasoning,  233,  234,  268  
Problems  in  Knowledge-­Intensive  Work,  341   Reasoning  about  Risks,  248  
problem-­‐solving,  34,  35,  41,  239,  264,  277,  291,  293,   Reasoning  approaches,  complex,  259  
349   Reasoning  approaches,  highly  complex,  266  
problem-­‐solving  schema,  278   REASONING  BY  DEFAULT,  263  
Problem-­‐solving  with  proxy  beliefs,  279   reasoning  direction,  237  
Problem-­‐solving,  creative,  290   Reasoning  Strategies,  238  
Problem-­‐solving,  crisis,  284   REASONING  WITH  MULTIPLE  HYPOTHESES,  265  
Problem-­‐solving,  evolutionary,  289   REASONING  WITH  PATTERNS,  246  
Problem-­‐solving,  exploratory,  289   REASONING  WITH  UNCERTAINTY,  248  
Problem-­‐solving,  generate-­‐and-­‐test,  288   Reasoning,  abductive,  243  
Problem-­‐solving,  mixed,  299   Reasoning,  analogic,  245  
Problem-­‐solving,  routine,  285   Reasoning,  associative,  245  
Problem-­‐solving,  systematic,  286   Reasoning,  commonsense,  239  
Index 425

Reasoning,  complicating  factors,  256   Satisficing,  285,  336  

Reasoning,  deductive,  240   Satisficing  Decision-­Making,  335  
Reasoning,  dominant-­‐hypothesis,  258   Schank,  Roger,  117,  175  
Reasoning,  fuzzy,  255   Schema,  112  
Reasoning,  inductive,  242   schema  for  problem-­‐solving,  278  
Reasoning,  metaphoric,  247   Schema  knowledge,  119,  122  
Reasoning,  model-­‐based,  252   Schema  learning,  203  
Reasoning,  most-­‐important  factor,  259   schema  reorganization,  107  
Reasoning,  multiple  hypotheses,  265   schema-­‐event  hierarchies,  114  
Reasoning,  nonmonotonic,  262   schemas,  85,  111,  114,  156,  157  
Reasoning,  spatial,  247   schemas,  100  
receptors,  82   Schön,  Donald,  306  
recognizing  patterns,  246   Script,  112  
reengineering,  301   Script  learning,  203  
Reference Case,  73   scripts,  85,  111,  114,  156,  175  
REFERENCE  CASES,  151,  153,  194,  252   scripts,  100  
Reference  Methodology  Knowledge,  119,  122   search  for  pleasure,  237  
Reframe,  42   SEARCHES,  268  
Reframing,  303,  304,  309,  345,  373   second-­‐nature  knowledge,  222  
Reframing  and  creativity,  309   self-­correct,  38  
reframing  purposes,  304   self-­‐development,  223  
Relational  Connections,  104   self-­‐eliciting,  136  
RELATIONS-­‐ESTABLISHING  NETWORKING,  359   Self-­Manage,  45  
relevant  actions,  41   Self-­Managed  Team,  370  
relevant  knowledge,  41   Self-­Managed  Teams,  363,  371  
reluctance,  273   self-­‐perpetuating  false  biases,  92  
Remembered  Sensory  Inputs,  138   self-­‐propagation  of  myths,  93  
Remembering,  88   Self-­Serving  decision  Factors,  340  
REMINDING,  117,  251   semantic  labels,  86  
repeated  practice,  222   Semantic  memory,  86  
REPETITION,  186   Semantic  Networks,  174  
Repetition,  lack  of,  187   semester  hour  equivalent,  127  
Representational  Issues,  292   semi-­‐automatic  decisions,  82  
Required  Team  Knowledge,  366   Sensors/Feelers,  198  
Requirements  for  Acting  Intelligently,  35   sensory  system,  81  
requirements  for  dealing  with  knowledge,  64   sequential  cues,  108  
Requirements  for  practice,  117   serial  processor,  82  
RESISTING  LEARNING,  221   shallow  knowledge,  118  
Resource Factors,  184   Shared  Expertise,  132,  134  
responsive,  37   SHARED  SCHEMAS,  117  
RETAINED  KNOWLEDGE,  127   SHE,  127  
retention  of  mental  objects,  82   short-­‐term  memory,  79,  81  
retroduction,  244   Show-­and-­tell,  45  
Revising  prior  knowledge,  207   sign  language,  86  
right  hemisphere,  81   Signals,  70  
RIGID  BEHAVIOR,  118   Simon,  Herbert,  278,  285,  324,  335,  336  
risk  avoidance,  248   Simon,  T.,  77  
Risk-­‐return  tradeoffs,  316   Simplified  Learning  Model,  189  
Rote  Learning,  190,  273   simplifying  approaches,  256  
Routine,  113   Singley,  Mark  K.,  209,  218  
routine  customer  inquiries,  225   Situation  Familiarity,  345  
Routine  learning,  203   Situational  decision  Factors,  339  
Routine  Problem-­Solving,  285   Skill,  76  
Routine  Working  Knowledge,  119,  123   skill  profiles,  171  
routines,  85,  111,  114,  156,  157   skill  transfer,  218  
Rules  of  thumb,  325   Skills,  71,  110,  115  
running  decisions,  291   skills  transfer,  197  
Slovic,  Paul,  248  
Smith,  Douglas,  362,  372  
S   Snap  Decision  Making,  327  
Social  sciences,  27  
Sakaiya,  Taichi,  22   society  of  minds,  74  
426 Knowledge Management Foundations:
Thinking About Thinking -- How We Create, Represent, and Use Knowledge in People and Organizations

solitude,  373   TEA,  170  

spatial  intelligence,  248   Team of Collaborating,  301  
spatial  reasoning,  247   Team  Work,  357  
specialized  languages,  135   TEAM  WORK  STYLES,  373  
specialty  knowledge,  183   TEAM’S  DRIVING  FORCE,  372  
Specialty  teams,  20   teaming,  219  
spiral  of  knowledge,  216   TEAMING  APPROACHES,  363  
Squire,  L.R.,  89   Teamwork,  45  
Stafford,  Sue  P.,  167   Technology,  71,  135,  140  
Stages  of  decision  making,  313   Technology,  74  
Stages  of  Knowledge  Development,  350   Technology States,  71  
Stages  of  Learning,  189   technology  transfer,  197  
STAGNATED  PROFESSIONAL,  109   TEMPORAL  REASONING,  260  
stagnated  professionals,  251   Texas  Instruments,  396  
Staiger,  Volker,  79   textbook  knowledge,  110  
Standard  operating  procedures,  324   The  New  York  Times,  224  
STAR  PERFORMERS,  45   theoretical  knowledge,  115  
statistical  intuition,  249   theoretical  understanding,  115  
Stehr,  Nico    .i.Cleveland,  Harlan,  22   theory  of  knowledge,  63,  64,  379  
Stewart,  T.  A.,  12,  25   Think  before  acting,  36  
Stories,  175   think  in  language,  87  
STRATEGIC  KNOWLEDGE  AUDIT,  14   think-­‐alouds,  110  
Strategy  Development,  384   Thinkers,  198  
subjective  knowledge,  98   Thinking,  233,  234  
suboptimizing  decisions,  322   thinking  about  thinking,  10,  36,  126  
suitable  behavior,  36   Thinking  and  knowledge,  234  
superstition,  93   thinking  direction,  237  
Survey  Knowledge,  381   top-­‐down  learning,  203  
suspicions,  271   Top-­‐down  problem-­‐solving,  298  
syllogistic  reasoning,  240   Total  Quality  Management,  xiii  
symbolic  states,  160   Tradeoffs  Between  Risk  and  Expected  Return,  316  
symbolic-­‐conceptual  relations,  86   training,  197  
synapses,  79   training,  76  
synchronic  knowledge,  110   Training  Programs,  187  
Synectics;,  239   Training  vs.  education,  223  
SYNERGY,  373   Tulving,  Endel,  85,  87  
SYNTHESIS,  280   Tversky,  Amos,  248,  335  
synthesize,  282   Types  of  Knowledge,  132,  136,  137  
Synthesizing,  278   Typical  Knowledge  Domains,  126  
System  knowledge,  119,  122  
Systematic  Analysis,  281  
SYSTEMATIC  Knowledge,  11,  70,  110,  119,  122,  187   U  
Systematic  Problem-­Solving,  286  
systems  and  procedures,  140   uncertain  variables,  99  
Uncertainty,  99  
Uncertainty  reasoning,  248  
T   UNDEREDUCATION,  231  
underlying  mechanisms,  115  
tacit  knowledge,  64,  124,  130,  133,  135,  140,  212   Understanding,  99  
Tacit  knowledge,  10   understanding  numerical  relations,  81  
Tacit-­to-­Tacit  Knowledge  Flow,  214   understanding  of  knowledge,  64  
TACTICS,  35,  40   unfounded  associations,  272  
Take  Initiative,  45   Universal  Management  of  Knowledge,  399  
Task Domain Areas,  172   Unsupervised  Learning,  191  
Task  Environment  Analysis,  170,  385   US  West,  396  
Task Environment Components,  172   Utility  Function,  316  
Task  Organization,  48   utility  theory,  316  
Task  Scenarios,  166  
Taskforces,  363  
Taxonomies,  172   V  
Taylor,  Frederick,  xii  
Taylorism,  xii,  228   Value  of  Knowledge,  7,  382  
Index 427

versatile,  39   working  memory,  79,  81  

Vigilant  Decisions,  336   work-­‐related  domain,  36  
VISION,  372   Work-­‐Related  Domain  knowledge,  126  
Vision  knowledge,  119   WORK-­‐RELATED  NETWORKING,  359  
visual  representations,  106   World  knowledge,  36,  126,  183  
visuo-­spatial  scratch  pad,  83   written  Chinese,  86  

W   X  

Watchers,  198   XCON,  394  

Weakened  associations,  88  
What It Means,  165  
Wielinga,  Robert,  388   Y  
Wiig,  Elisabeth,  xi  
Wiig,  Elisabeth  H.,  209,  266   Yu,  Dorothy,  167  
Wiig,  Karl,  26  
Winograd,  Terry,  358  
Wisdom,  70,  77  
Z  
Work  Function  Profiling,  165  
work  practices,  135,  172   Zadeh,  Lotfi,  256  
Work  Smart,  46   Zola-­‐Morgan,  S.,  89  
work  smarter,  34   Zola-­Morgan’s  Memory  Categories,  89  
work  task  fragmentation,  48   Zuboff,  Shoshana,  22  
Workflow,  48  
Working  Hypotheses,  138  
  

428

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