Presentasi KM dan CA

  Know ledge Management, Know ledge Management,

I nnovation, and Competitive

  

I nnovation, and Competitive

Advantage Advantage

  Syamsul Arifin Syamsul Arifin

  Mas Wigrantoro Roes Setiyadi Mas Wigrantoro Roes Setiyadi

  Jakarta, 29 September 2006 Strategi Mengelola Aset Pengetahuan Dalam Perusahaan Berbasis Sa

  Strategi Mengelola Aset Pengetahuan Dalam Perusahaan Berbasis Sa ins ins Managerial challenges that flow from the centrality of knowledge that flow from the centrality of knowledge and intellectual property are different from those of a bygone e and intellectual property are different from those of a bygone e ra ra where physical assets were key to CA. where physical assets were key to CA.

  Background Background

  I n the new economy (knowledge economy, CA of a firm depends on I n the new economy (knowledge economy, CA of a firm depends on their ability to their ability to

• – –
• – –
• – –
• – –
• Fuelled by a free market philosophy and new information
• This trend is well established and is unlikely to be reversed
• Managerial challenges

  : :

  Create Create

  Transfer Transfer

  Untilize Untilize

  Protect Protect

  I t must be I t must be difficult to immitate knowledge asset difficult to immitate knowledge asset

  Fuelled by a free market philosophy and new information technology, these developments have a leveling effect with CA technology, these developments have a leveling effect with CA

  This trend is well established and is unlikely to be reversed

  Creating Value With Knowledge Creating Value With Knowledge

  Assets Assets

  Firms must innovate internally in the absence of a w ell Firms must innovate internally in the absence of a w ell developed know ledge marke developed know ledge marke

t

t

  they cannot be readily bought or sold in the commodity

• they cannot be readily bought or sold in the commodity
• the nature of knowledge assets:
• – – must be built in must be built in - - house by firms house by firms
• – –
• – –

• – –

  like market like market for knowledge assets: it is difficult to articulate and codify for knowledge assets: it is difficult to articulate and codify

  ‘ ‘ tacit tacit dimension dimension

  ’ ’

  (Teece, 1981) (Teece, 1981)

  the nature of knowledge assets:

  must be exploited internally must be exploited internally

  this condition is because of the absence of this condition is because of the absence of

  market for know market for know

  how is far from complete how is far from complete

  if it exists, it is far from efficient if it exists, it is far from efficient

  

transactional difficulties are mainly with organizational knowle transactional difficulties are mainly with organizational knowle dge dge

  

Personal Knowledge Different From

Personal Knowledge Different From

  Organizational Knowledge Organizational Knowledge

  personal know ledge personal know ledge

• – readily bought and sold
• – readily bought and sold
• – transactions occur when an individual talent is hired or fired
• – transactions occur when an individual talent is hired or fired

  organizational know ledge ( organizational competent) organizational know ledge ( organizational competent)

• – embedded in organizational
• – embedded in organizational

  process process

  procedures procedures

• routines routines

  structures structures

• – such knowledge cannot be moved into organization without the tra such knowledge cannot be moved into organization without the tra nsfer nsfer – of clusters of individuals with established pattern of working t ogether or

  of clusters of individuals with established pattern of working t ogether or strategic alliance through: strategic alliance through:

  joint venture joint venture

  merger merger

• acquisition acquisition

  Transferring Knowledge Assets Transferring Knowledge Assets

  1

  1

Transfer inside the firm

• Transfer inside the firm
• – –
• – –
• – –

Float Float

  

Though not impeded by proprietary concerns,

Though not impeded by proprietary concerns,

transfer inside the firm is not always straight forward transfer inside the firm is not always straight forward

  Knowledge need to be transferred is not only Knowledge need to be transferred is not only technological, but also knowledge about: technological, but also knowledge about:

  Competitors Competitors

  Customers Customers

  Suppliers Suppliers

  Managerial experience Managerial experience

  Accomplishing knowledge transfer within a firm is Accomplishing knowledge transfer within a firm is essential: essential:

  Distributed nature of competence within firm Distributed nature of competence within firm

  Availability of tools to assist transfer Availability of tools to assist transfer

  

The importance of knowledge to competitiveness

The importance of knowledge to competitiveness

  Float: the time elapsing between knowledge discovery/ creation and knowledge discovery/ creation and transfer/ use is extremely expensive: transfer/ use is extremely expensive:

• Float: the time elapsing between
• – –

  I f a company with a three year development I f a company with a three year development and manufacturing cycle and another has a and manufacturing cycle and another has a two two

  year, the company with the shorter cycle year, the company with the shorter cycle will have better CA will have better CA

• 2

  Transferring Knowledge Assets

External transfer External transfer

• – –

  External flow is protected by I PR External flow is protected by I PR

  I PR law does not protect knowledge

• – –

  I PR law does not protect knowledge

• – –

  External transfer of technology is frequently External transfer of technology is frequently aided by licensing and technology transfer aided by licensing and technology transfer agreement agreement Once it is codified, e.g. electronically, it is also harder to p Once it is codified, e.g. electronically, it is also harder to p rotect rotect

  I nformation and KM I nformation and KM

  I nformation transfer is not knowledge transfer I nformation transfer is not knowledge transfer

• Example: Bloomberg or Reuters newsfeed is information. The
• Once knowledge made explicit, it is easier to store, reference,

equity pay equity pay

  I nformation management is not knowledge management I nformation management is not knowledge management

  Knowledge is not primarily about Knowledge is not primarily about facts facts and and content content ; rather, it is

  ; rather, it is about about context context

  Example: Bloomberg or Reuters newsfeed is information. The

opinions of the analysts and commentators putting the news into

opinions of the analysts and commentators putting the news into

context and enabling it to be used to create values is more pert context and enabling it to be used to create values is more pert inent inent to knowledge. to knowledge.

  

The combination of I T and co The combination of I T and co - - aligned organizational process can aligned organizational process can

enhance learning and competitive advantage enhance learning and competitive advantage

  The conversion of tacit to explicit knowledge helps knowledge The conversion of tacit to explicit knowledge helps knowledge transfer and sharing, hence make firm more innovative and transfer and sharing, hence make firm more innovative and productive productive

  Once knowledge made explicit, it is easier to store, reference, share, share, transfer, and redeploy transfer, and redeploy

  

KM and The Design Of Firms

KM and The Design Of Firms

  structural issues

• structural issues
• – –
• – –
• – –
• – –
• – –

• • compensation and employment issues

• – –
• – –
Firm boundaries can no longer be defined by reference to equity stake stake

  flexible boundaries flexible boundaries

  high powered incentives high powered incentives

  non non

  bureaucratic decision making bureaucratic decision making

  shallow hierarchies shallow hierarchies

  innovative and entrepreneurial culture innovative and entrepreneurial culture

  compensation and employment issues

  performance based performance based

  Challenges To Orthodoxy Challenges To Orthodoxy

  

Development, ownership protection and utilization of knowledge

Development, ownership protection and utilization of knowledge

assets, not physical assets, provide underpinning for CA assets, not physical assets, provide underpinning for CA

• Protection and retention of firm
• Today
• Entrepreneurial function of firms in the new economy is more cri
• Firm boundaries can no longer be defined by reference to equity

  Protection and retention of firm ’

  ’ s knowledge is key challenge for top s knowledge is key challenge for top management management

  Today ’

  ’ s competitive new environment favors firms that are able to s competitive new environment favors firms that are able to protect knowledge assets from recontracting hazards protect knowledge assets from recontracting hazards

  Entrepreneurial function of firms in the new economy is more cri tical tical than the administrative ones than the administrative ones

  

Compensation structure should be performance Compensation structure should be performance - - based and equity based and equity - -

based payments based payments

  Virtual structures are frequently virtuous Virtual structures are frequently virtuous

  Managing knowledge is not the same as human resource Managing knowledge is not the same as human resource management management

  Knowledge is sticky Knowledge is sticky

  Knowledge Caracteristics Knowledge Caracteristics

  Extraordinary leverage and increasing returns Extraordinary leverage and increasing returns

  Fragmentation, leakage and the need for refreshment refreshment

• Fragmentation, leakage and the need for

  Knowledge is constantly changing

• Knowledge is constantly changing

  Uncertain value Uncertain value

  Most new knowledge is context specific Most new knowledge is context specific

  Knowledge is subjective Knowledge is subjective

  Key Elements in Knowledge Key Elements in Knowledge

Management

  Management

  People Technology Process

  Cultural context Strategy

The Knowledge Learning Spiral - Knowledge - The Knowledge Learning Spiral

  _Knowledge Learning

  Learning Knowledge _Learning

  Knowledge _{Knowledge Learning Q = learning that come from asking questions, looking at the evidence, and discussing or P = programmed learning that come from books, lectures or secondary sources} Learning = P + Q _{drawing conclusions based on experience} Stages in KM Evolution Stages in KM Evolution _a nce

  Perform _{Adaptive Mechanist} Organic

  Reactor _{2.6 3.7 6.3 Time (years)}

• Piecemeal Piecemeal
• Group/ department scale
• Narrow
• Lacking senior
• Rigid functional structures
• Poorly understood Poorly understood

  Benefits purely Benefits purely understood in technical understood in technical gains (efficiency) gains (efficiency)

  Rigid functional structures

  driven (data transfer driven (data transfer led) led)

  I T

  I T

  Group/ department scale involvement involvement

  Poor communications and Poor communications and awareness awareness

  benefits by individual benefits by individual employees employees

  Driven by small group of Driven by small group of middle management middle management

  Lacking senior management support management support

  Narrow departmental/ group focus departmental/ group focus

  implementation implementation

  hoc programme hoc programme

  Ad Ad

  Reactive Reactive

  KM Strategies KM Strategies

  Little alignment with long long - - term strategies term strategies

• Little alignment with

• Organization
• Good awareness of
• Mandated by senior
• Driven by middle
• Managed structures and

  Managed structures and processes processes

  driven (but process driven (but process and systems led) and systems led)

  I T

  I T

  Good awareness of potential gains for the potential gains for the individual individual

  wide wide involvement involvement

  Organization Organization

  wide wide awareness awareness

  Organization Organization

  Driven by middle management management

  Mandated by senior management management

  wide wide implementation implementation

  Organization

  (explicit) (explicit)

  Systematic programme Systematic programme

  Mechanistic Mechanistic

  KM Strategies KM Strategies

  Benefits broadly Benefits broadly understood (efficiency understood (efficiency and effectiveness) and effectiveness)

• Organization
• Systematic programme
• Good awareness of potential
• Organization
• Driven by middle
• Benefits broadly understood
• Organization

  Open and evolving Open and evolving structures/ processes structures/ processes

  (efficiency and effectiveness) effectiveness)

  Benefits broadly understood (efficiency and

  driven (but backed driven (but backed by I T) processes and by I T) processes and systems systems

  People People

  Good awareness of potential gains for the individual gains for the individual

  wide wide involvement involvement

  Organization

  wide wide awareness awareness

  Organization

  Driven by middle management management

  Mandated by senior Mandated by senior management management

  wide wide implementation implementation

  Organization

  (explicit)

  Systematic programme (explicit)

  Organic Organic

  KM Strategies KM Strategies

  Alignment with strategy

• Alignment with strategy

Factors I mpacting KM Factors I mpacting KM

  Demand Logic _{(network effects)} Appropriability _regimes ^{Cost logic I mportance of knowledge assets to competitive advantage Technological} _{Opportunities/ uncertainties}

  National systems of innovation ^{Contracting environment Levels of economic development}

  Organisations must develop greater organisational flexibility and must retain a organisational flexibility and must retain a high level of system knowledge, even high level of system knowledge, even when they procure (or supply) when they procure (or supply) components in intermediate markets ( components in intermediate markets (

  Organisational Flexibility Organisational Flexibility

• Organisations must develop greater

  Brusoni Brusoni and Prencipe, 2001 and Prencipe, 2001 ).

  ). Building Knowledge by Using Building Knowledge by Using

  Organizational Process Organizational Process _{External state of knowledge}

• _{- the process that shape knowledge - static state of knowledge, and} Consider the difference:
I nternal state _{of knowledge processes} Control _{Searching Assembling Appropriating}

  Characterized by: Characterized by:

  Statis State of Knowledge Statis State of Knowledge

  Tacitness, Tacitness,

  Observability, Observability,

  Rivalry in use, Rivalry in use,

  

Degree of which knowledge is autonomous or

Degree of which knowledge is autonomous or

systemic, and systemic, and

  Extent of appropriability Extent of appropriability ^{(Nonaka, 1994) (Nonaka, 1994)}

  

They provide singular and temporally bounded

They provide singular and temporally bounded

representation of a firm representation of a firm

  ’ ’ s knowledge ( s knowledge ( ^{Kim & Kogut, 1996 Kim & Kogut, 1996} ).

  ). Process That Shape Knowledge

  

Sequence of states of knowledge that a

firm follows over time; firm follows over time;

• Sequence of states of knowledge that a

  Technology trajectory Technology trajectory

  

Each path arises from the influence of a

Each path arises from the influence of a

particular combination of control variables particular combination of control variables

• – –

  organizational processes that influence organizational processes that influence and change the state of knowledge of the and change the state of knowledge of the firm. firm. Punctuated Equilbrium and Punctuated Equilbrium and

  Organizational Evolution Organizational Evolution

  Strategy _Critical tasks _{Over time, the for among business units strategy, skills, and culture evolves to} People Culture _{Formal When these changes occur, managers reflect changing markets and technology. organisation new strategic challenge.} need to realign their units to reflect their _{Innovation Differentiation Cost} Source: Burgleman et all, 2001 Two I nvisible Forces: Technology Two I nvisible Forces: Technology

  Cycles and Evolution Cycles and Evolution _{Product innovation Process innovation Product innovation Process innovation}

  Dominant _{design #2} ^Substitution _{event Time Dominant design #1} ^{Rate of Innovation}

  

The I nternational Product Life Cycle

The I nternational Product Life Cycle

  (Old Paradigm) (Old Paradigm)

  Stage One _{INNOVATION Innovative firms create} new products and _{processes in their country of origin; an advanced industrialised country} ^{Stage Two FOREIGN PRODUCTION Second-tier country subsidiaries receive} _{products/ processes from innovators and produce for local market} ^{Stage Three TRANSFER Developing country subsidiaries receive products/} _{processes from innovators for local market and global markets at low cost} ^{Innovative Country Product Life Cycle Second-Tier Country Product Life Cycle Developing Country Product Life Cycle Source: Vernon, 1966}

  Europe Europe

  2.18

  World World

  351,487 351,487

  4,909 94,777 94,777

  2.80 4,909

  2.80

  Japan Japan

  101,097 101,097

  2,162 225,832 225,832

  2.16 2,162

  2.16

  2.63 2.63 3,676 3,676 170,681 170,681 125,808 125,808

  Kemampuan R&D Kemampuan R&D

  United States United States

  1.08 1.08 607 607 92,114 92,114 99,111 99,111

  middle middle income income

  Upper Upper

  23,772 23,772

  257 24,475 24,475

  0.57 257

  0.57

  Income Income countries countries

  Low

  Country type Country type Expenditure on Expenditure on R&D per cent of R&D per cent of GDP GDP Scientists and Scientists and Engineers in Engineers in R&D (per R&D (per million people) million people) High High - - technology technology export $ million export $ million Patent Patent applications applications “ “ Resident Resident ” ” Low

  2.18 NA NA 820,617 820,617 798,003 798,003 _{Sumber: World Bank World Development Indicators, 2000} Evolution of Global R&D Activities _{Type of Research Centers:} Evolution of Global R&D Activities _{Centre of 3. Supporting/adaptive units 2. Development laboratories 1. Research laboratories} excellences

  4. Scanning units _{Local Research Lab} adaptaion _{Central R&D Central R&D Lab}

  Lab _{lab Development adaptaion Local}

  

Performance Evaluation Criteria

Performance Evaluation Criteria

  Performance Performance Measurement Measurement Scientific innovation

  Scientific innovation Number of patents

  Number of patents Number of publications in research journals

  Number of publications in research journals Commercialisation

  Commercialisation Time to market

  Time to market Profitability

  Profitability Research unit as profit center

  Research unit as profit center Cost

  Cost Budgeting targets

  Budgeting targets Collaboration

  Collaboration Organisation of conferences and internal seminar Organisation of conferences and internal seminar Internal presentation papers

  Internal presentation papers Number of publication listed on the Internet

  Number of publication listed on the Internet Characteristics of Legal Forms of Characteristics of Legal Forms of

Protection in the USA Considerations Considerations Copyright Copyright Trade secret Trade secret Patent Patent Trademark Trademark Mask works* Mask works* National uniformity National uniformity Yes Yes No No Yes Yes Yes Yes Yes Yes

  Protection in the USA

  Protected property ^{Protected property Expression of idea Expression of idea Secret information Secret information Invention Invention Goodwill Goodwill Semiconductor Semiconductor} _{Scope of protection Scope of protection Exclusive right to Exclusive right to reproduce, prepare reproduce, prepare derivative works, derivative works,} publicly distribute, publicly distribute, _{Effective date of Effective date of display and perform display and perform} ^{Right to make, use Right to make, use and sell secret and and sell secret and protect against protect against improper use or improper use or} _{disclosure disclosure} ^{Right to exclude Right to exclude others from making, others from making, using, selling using, selling Proscribes against Proscribes against misrepresentation of misrepresentation of source source} _{protection protection Creation of work Creation of work From date of From date of conception or receipt conception or receipt} of secret information _{Cost of obtaining} ^{of secret information Patent application Patent application date date Use and/or filing date Use and/or filing date of US application of US application issuing as principal issuing as principal} _{registration on or registration on or after 16/11/89 after 16/11/89} ^{First commercial First commercial exploitation exploitation} _{Cost of obtaining} protection ^{protection Low Low Low Low Moderate Moderate Low Low Low Low} _{Term of protection Term of protection Life of author plus Life of author plus 50 years or 70 years 50 years or 70 years Possibility of Possibility of perpetual protection; perpetual protection; or termination at any or termination at any} time by improper ^{time by improper} _{disclosure or disclosure or individual individual development by development by others others} ^{20 years 20 years Perpetual if used Perpetual if used correctly and correctly and diligently policed diligently policed 10 years 10 years} Cost of maintaining ^{Cost of maintaining} _{protection protection} ^{Nil Nil Moderate Moderate Moderate Moderate Moderate Moderate Nil Nil} _{Cost of enforcing Cost of enforcing Moderate Moderate High High High High Moderate Moderate Moderate Moderate} organization alignment organization alignment matrix matrix

  Proper alignment _{Value realized only within technology layer No inefficient interactions Misalignment Can’t manage interactions Insuficient infrastructure} Proper alignment _{Value realized in the system Effective coordination of undefined interactions} ^Misalignment _{Unnecessary internal coordination Reduced scale economies} ^{Modular Integral Decentralized organization} _{Centralized organization} Technology Phase Shift

  Technology Technology

Technology Phase Shift

  Integral _technology Nature of Modular _{I X T-a M X X T-b X I T-a M T-b X X X X} ^Time

  

Two Views Of I nnovation And

Two Views Of I nnovation And

Technology Phase Shifts

  Technology Phase Shifts

  T-a: Phase shift _{(Integral – Modular)} Integrality trap ^{I: Simply integral}

  T-b: Phase shift _{(Modular – Integral)} Modularity trap ^{M: Standby modular Integral} _Modular ^{Source of innovation (ex ante expectation)}

I nputs to I nnovation

  I nputs to I nnovation

  Culture Infrastructure Resources

  Process ^Innovation _{Sumber: Gaynor, 2002} ^{Innovation = Invention + Implementation/Commercialization} n M a tr ix n M a tr ix

  Architectura ^{l R adical} _{Changes core design concept}

^{Obsolete technologies,}

to new architecture

^{processes, and people}

^{Dominated by societal and government regulations Develop into major new business or spawns an industry Brings the user a new}

^{value proposition}

^{Moment in history that set the stage for the future S ystems Disruptive Breakthrough}

  

Stages of The System Approach to

Stages of The System Approach to

The I nnovation Process

  The I nnovation Process

  Idea-Concept- _{Invention ICI Stage} Opportunities _{Concept Knockouts Strategic fit} Resources _{Infrastructure Metric Deliverables} ^{Marketing plans Commercialization/ Implementation Line extensions Exploring} _{Technologies New markets Product platform} ^{Framework Scope Funding Competencies Technology} _{Marketing Distribution Implementation} ^{Funding Concept framework Design iterations Integration Prototypes} _{Models Simulations Project plan} ^{Project-Product Launch Project Stage Pre-project Stage The innovation stage – managing the unknown, the uncontrollable, and the unpredictable Validating design parameters and preparing project plans – requesting funds many time Innovative ends – follow project management principles – business plans A systems approach – depends on industry and firm’s business practice}