Case Study: Knowledge Management at Northern Gate

Executive Summary

Knowledge management has become commonplace in contemporary organizations due to the need to use information for strategic and tactical value. This paper entailed a knowledge management scenario at Northern Gate, one of the largest defense contractors in the US military with staggering annual revenues of up to $30 billion. A number of analysis points emerged from the case. First, the main issue was how to retain knowledge in the air combat systems (ACS) section in the wake of downsizing, where 2,000 employees were to be relieved of their official duties. NG also had large amounts of tacit and explicit information to harness and retain in the foregoing, though there was more tacit than explicit information at risk following the impending move. This is because tacit information is retained in the personal experiences of the 2,000 employees to be culled from the workforce.  It was also important to note that a knowledge audit carried out by the Delphi group revealed a positive and supportive knowledge management culture in the organization. Consequently, three knowledge management objectives were crafted including coming up with an integrated knowledge management system for handling explicit knowledge, activating knowledge sharing between employees and experts in different knowledge areas and the creation of formal and informal guidelines for sharing knowledge between employees. The proposed knowledge management strategy was to carry out 80% personification (to facilitate knowledge sharing between experts and employees and within employees) and 20% codification (to handle explicit information). In the latter, there would be a greater investment on big data analytics though the technology applied to both parts of the strategy. Applying the Siemens AG knowledge management maturity model revealed that NG was at the second stage, dubbed ‘repeatable”. The processes related to both parts of the strategy were exemplified in the SECI model, with personification focusing on “socialization” and codification relying on “combination”. For the strategy to be successful, there was need to focus on offering technological and managerial support as well as sustaining a culture that supports knowledge management. 

Introduction

The concept of knowledge management has gained centrality in many business organizations in the present day due to the need to offer continuity in service provision in the face of a number of constraints such as brain drain and insufficient expertise in human resources. Competitive forces and strategic shifts have forced organizations to downsize, a process that leads to loss of useful information, while some areas of expertise continue to suffer a dearth of competent persons (Khatibian, Hasan gholoi pour & Abedi Jafari, 2010). Knowledge management endeavors to solve these challenges by ensuring that the organization creates, stores, shares and utilizes information in a way that creates competitive advantage and value. Simply put, knowledge management is the process of coordinating and exploiting the firm’s knowledge resources to create benefits and meet strategic objectives. There are two types of knowledge found in an organization, namely tacit and explicit. While the latter is codified and found in documents and databases, tacit knowledge is retained in the personal experiences of people and is unrecorded (Nonaka & Toyama, 2015). Organizations must find ways of harnessing both types of knowledge for both short term success and growth. In this paper, a case scenario of knowledge management at Northern Gate is presented, encompassing analysis and formulation of knowledge management objectives, a knowledge management strategy and critical success factors for the strategy.  

Case Analysis

The main conundrum in the case scenario was how to downsize while retaining essential information of organizational tactical and strategic value. Knowledge management had offered a solution in a similar case in the past, where the technical team working on the B-2 Stealth Bomber having to leave despite the fact that their knowledge was needed in maintenance and running of the aircraft. A proper knowledge management strategy was put in place to ensure that knowledge was conserved to properly assist the maintenance and operation of the B-2 Stealth Bomber after it reached the end of its production life (Bali, Wickramasinghe, & Lehaney, 2009). Building on this past success, the organization was now looking at a new scenario in the air combat systems (ACS) section where around 2,000 employees were about to be laid off. While the downsizing was needed for strategic shift, there was a danger of losing valuable information in the process. John Smith, the project manager in the fresh knowledge management initiative understood that they needed a similarly effective solution again to ensure the continuity of their operations post-downsizing. 

Northern Gate is a large business corporation with huge amounts of both tacit and explicit knowledge. It is the third largest defense contractor in the US Military employing 112,000 people and clocking $30 billion in annual revenues (Bali, Wickramasinghe, & Lehaney, 2009). Tacit knowledge, as earlier discussed, refers to the unrecorded knowledge that is retained in the experiences of people and therefore cannot be retrieved without human interaction. The sheer size of Northern Gate’s workforce (122,000) indicates that there is lots of tacit knowledge in the organization. In addition, a large portion of their employees are technical experts in areas such as software engineering, design and electronic engineering with over twenty years’ experience. These technocrats were responsible for the design of the B-2 Stealth Bomber and other complex products including naval vessels. The quality and quantity of tacit knowledge in the organization was very high, more so in the air combat systems (ACS) section which carried out the majority of the product development. Explicit knowledge was equally in large amounts given that the ACS section dealt with a number of projects and codification in the earlier knowledge management initiative resulted in over 100 categories. The tacit information was more important than the explicit one, given that the latter could be easily accessed from the organization’s database. In addition, tacit information was more enriched, encompassing the experiences of technical staff that are unique to the organization and some of its sophisticated products. The knowledge management initiative under John Smith therefore needed to focus on the tapping and retention of tacit knowledge. However, it must also address recalcitrant issues of explicit knowledge such as access by the right people at the right time, proper storage of such knowledge, updating and discarding of sections of it as necessary.

The organizational knowledge culture is a factor of huge importance in the development of the appropriate knowledge management strategy at Northern Gate (NG). From the survey carried out by Delphi consultants, it was apparent that the prevailing culture was quite supportive of a knowledge management (KM) initiative. First, the employees appreciated the essence of knowledge management in the organization. As such, a large number of them appreciated the role of knowledge sharing and utilizing information from others in day to day operations, while also understanding the importance of being willing to share information. In addition, an overwhelming 75% of them acknowledged that information was somewhat or very important, which implies that a knowledge management initiative would be welcome in the organization (Bali, Wickramasinghe, & Lehaney, 2009). More fundamentally, the employees appreciated the role of tacit information, with 51% affirming its value. This meant that half the employees appreciated the fact that they were the prime custodians of information and were critical in knowledge management as far as generation and sharing of information was concerned. The firm therefore had a strong culture that could be leveraged on in the design and implementation of the knowledge management initiative, more so given the extended importance of tacit information.

Knowledge Management Objectives

In light of the scenario at Northern Gate, the following knowledge management objectives apply:

1. To create an integrated knowledge management system that focused on the access, retrieval, sharing and updating of explicit knowledge.
2. To activate knowledge sharing between the employees and various experts in different knowledge areas in the long term. 
3. To develop formal and informal guidelines of knowledge sharing between employees working at different capacities in the organization.

Justification of Objectives

The first objective of the proposed knowledge management initiative is to come up with an integrated knowledge management system (KMS) enabling the access, retrieval, sharing and updating of explicit knowledge. This was informed by the large quantity of explicit knowledge that the organization carried more so in its air combat systems (ACS) section. There was information on design, various aspects of engineering as well as statistics on past activities (Bali, Wickramasinghe, & Lehaney, 2009). This information needed to be accessed at the right time by the right people without the specialized help of any employee. The gist of this system is to ensure that consequent to the downsizing; explicit knowledge in the institution can be accessed, retrieved and shared when needed.  The loss of any employee in the downsizing process shall therefore not be an impediment to the exploitation and utilization of explicit knowledge. The integration of the system is necessary to ensure that the information can be shared comfortably. Notably, the ACS section consists of several sub-sections that are interdependent and therefore need the active sharing of information. Each department should be able to access information from another at the highest level of convenience. In addition, updating and discarding is necessary to ensure that the system not only carries useful information but in sizeable portions. 

The second objective was to come up with a method of activating knowledge sharing between the employees and experts in various knowledge areas. This was in realization of the importance of tacit knowledge to the organization. Tacit knowledge in the ACS section was rich and of high quality given that a number of technical experts in the organization. There was need to create a bridge between them and the employees at all times, regardless of the gap of knowledge between them. Access to experts after the downsizing will be critical for the continuity of a number of specialized operations. For instance, to carry out servicing and maintenance of various military infrastructures, there may be need to contact the engineers and designers who came up with their various components (Bali, Wickramasinghe, & Lehaney, 2009). Having a reliable contact with various experts in different knowledge areas will ensure that various operations at Northern Gate (NG). 

The final objective was to develop formal and informal guidelines of knowledge sharing between employees at various capacities within the organization. This was also with respect to appreciating the role of tacit knowledge in the organization. Employee sharing of knowledge was critical in ensuring continuity of operations and leveraging on each other’s strengths and knowledge areas. By sharing knowledge, the staffs were also likely to be more equipped with diverse information and skills and therefore become versatile in their operations. In addition, semi-skilled workers would benefit and attained skilled to expert status. A culture of sharing knowledge would also work well to integrate new individuals into the organization and aid their smooth transition from school/other organizations into their new roles. Notably, a large number of employees at Northern Gate appreciated the need and role of information sharing to their development. The organization therefore needed to take advantage of the prevailing culture and create formal and informal guidelines of sharing knowledge between employees in the organization. 

Knowledge Management Strategy

Overview

The development of a sound knowledge management strategy to meet the priory set objectives for Northern Gate (NG) requires a proper understanding of the present state, the roadmap to the desired level and the ultimate point of interest. In other words, before a good strategy is identified, the level of maturity of the organization’s present knowledge management infrastructure must be deciphered. In this respect, the Siemens AG Knowledge Management Maturity Model comes in handy. The model consists of five stages including initial, repeatable, managed and optimized from which the organization’s knowledge management can be rated (Khatibian, Hasan gholoi pour & Abedi Jafari, 2010). Looking at the current frame of Northern Gate and their past experience with knowledge management, the company is clearly at the second stage, “repeatable”. This rank applies when knowledge management has been recognized, implemented and tested.  There is evidence to support this given that NG had implemented knowledge management in the early 2000s when the ACS section was downsizing for the first time. The implementation was successful and thus the current attempt was a repeat. In addition, the employees of the organization acknowledge the importance of knowledge management as a practice in the organization, and particularly appreciate the role of tacit knowledge. Therefore, the organization was still at a low level of maturity and lots of efforts were needed to move from the repeatable point to the optimized level.

The selection of strategy for NG rests on two important factors, the results of the knowledge audit and the predominant type of knowledge in context. The knowledge audit carried out by the Dephi group under the commissioning of John Smith had great ability of helping to understand what strategy would suit the organization. Several elements emerged from the audit. First, knowledge sharing between projects was problematic, something that needed to be addressed in the strategy to be adopted. On the positive side, employees understood the importance of knowledge management and in particular the sharing of knowledge between them (Bali, Wickramasinghe, & Lehaney, 2009). They characterized tacit knowledge as the most important, which agrees with dominant theories of knowledge management. This form of knowledge may be hard to retrieve and transfer, but offers rich skills and experience from one person to another. On the other hand, it is important to consider the type of knowledge that was at stake in the advent of the downsizing. About 2,000 employees were going to be laid off, many of whom had expert knowledge in various performance areas. Therefore, it was tacit knowledge that was largely endangered by the proposed act of downsizing. The proposed strategy therefore needed to focus on harnessing tacit knowledge while also ensuring that knowledge sharing between projects was successful. This augmented well with the listed objectives which entailed an integrated knowledge management system for dealing with explicit information and two objectives focusing on tacit information.

The strategy to be adopted in the case of Northern Gate (NG) is thus 80% personalization and 20% codification. This implies the application of both personalization and codification strategy albeit with a bias towards personalization. Personalization strategy aims to use technology to encourage communication between people in transfer and exchange of information. In this respect, individuals share information through discussion forums and knowledge networks rather than storing it. The strategy works by either leveraging on interpersonal relationships or strengthening such relationships to encourage knowledge sharing between different groups of people. In this case, IT infrastructure is brought onboard in form of collaborative tools, online discussion forums, networking platforms and so forth. On the other hand, codification strategy entails collection of information, storing it codified form and providing it when needed to the right people. This strategy requires a heavier investment in IT that supports the storage of the information, integration, sharing and retrieval in the most convenient way. However, it is important to note that the organization strategy in this case shall lean towards personalization. 

Operationalization of the Strategy

The codification strategy shall be employed with respect to the first objective set for knowledge management at NG: to create a knowledge management system (KMS) focused on the on the access, retrieval, sharing and updating of explicit knowledge. Therefore, codification shall be restricted to this sole objective and shall only cover explicit knowledge, which entails documented information in files and online databases. Given that the organization’s maturity level was “repeatable” having carried out codification in the past, the new strategy shall be encompassing in the sense that it shall not only focus on storage of information but also how to update it (Nonaka & Toyama, 2015). This implies the deletion of obsolete information from the system and replacing it with new up to date information. The codification strategy shall in particular target the information that was previously in the custody of the 2,000 employees that are due to be laid off. It must be captured properly in the KMS and integrated with other data synonymous with the ACS section. There should be a comprehensive database that stores information from all departments with easy retrieval besides also ensuring that the entire system is integrated and secure.

The use of Big Data and Analytics shall be pervasive in the codification strategy. This shall largely be in turning the huge amount of data stored in the KMS into strategic and tactical value. Ideally, the information stored in its large quantities and raw format may not be of much use in the long term. As the dataset grows following operational expansion, it may become difficult to retrieve desired information from the system with the desired urgency and notice any actionable intelligence from it (LaValle et al., 2011). Therefore, for the data to be utilized in decision making way after the downsizing has occurred, there is need to inject big data analytics into the system. Big data analytics refers to advanced techniques applied to large volumes of unstructured data to unmask correlations, trends, preferences and other relevant information that quickens decision making. Therefore, it entails arranging the coded information in a way that can be used by various parties in a convenient and more useful way. Normally, it is useful for only large datasets which is qualified in the size of the ACS section and the number of employees to be laid off. There was clearly lots of information to be handled which justified the use of big data analytics. This meant that the organization would need to invest heavily in the appropriate software to run big data analytics as well as data scientists who can handle such amount of knowledge. The budget for the codification strategy will be slightly higher than that of the personification strategy despite being the minor strategy.

The process of codification shall follow the combination element of the SECI model. The SECI model consists of four elements, including socialization, externalization, combination and internalization. Socialization involves the conversion of knowledge from tacit to tacit through observation, practice, imitation, guidance, apprenticeship and others alike (Nonaka, Toyama, & Konno, 2005). This does not fit in this context given that the information in question is explicit. Externalization requires the conversion of information from tacit to explicit. This is considered difficult as one cannot accurately and comprehensively translate and codify their personal experiences for the use of other employees. On the other hand, internalization entails the conversion of explicit information into tacit. Thus, an employee goes through codified information and transforms it into experience and skills. This is also inapplicable to the codification strategy which leaves the combination option as the only remainder. Combination entails bringing together codified information to create new knowledge. This process shall therefore entail bringing together different pieces of information to create new content that is useful for the organization. The combination process augments well with the use of big data analytics as they help to create meaningful patterns in large volumes of information which can be regarded as “new” information.

The personalization strategy shall be used to address the second and third objective. These include fostering communication of employees to experts of various knowledge areas and creating informal and formal guidelines for knowledge sharing between employees. Interacting with experts of various knowledge areas shall help employees to troubleshoot any problems that they shall encounter after the downsizing has occurred. There are certain ways in which the organization can encourage experts to share their knowledge with employees even as they come to terms with the reality of the downsizing. One of such methods is exploring motivational strategies such as offering small bonuses and incentives. Experts shall receive a small stipend for engaging employees through various set channels and helping them to get solutions. In this case, the experts, though not in formal contracts with the organization shall be retained as bit part consultants that can be accessed over mail or phone to share information.  There is need to integrate big data analytics in this process to help rate experts, locate them and analyze the nature of information they given in terms of knowledge areas and usability (LaValle et al., 2011). For interaction between employees, the organization should come up with knowledge sharing discussion platforms, forums and social media groups. These encourage employees to be free with one another, develop a rapport and freely share information that is of use to the organization. To motivate employees to share information between them, rewards can be offered for such initiatives as well as deliberate exchange programs that require different groups of people to work together and share information. 

The process of personalization shall also borrow from the SECI model. However, it shall largely utilize the socialization element of it. This entails the knowledge conversion from tacit to tacit. It is actualized through observation, apprenticeship, imitation, guidance and other methods within which it is possible to share useful personal experiences. In this case, employees shall gain lots of knowledge and experience from experts by interacting more closely and obtaining information directly from them (LaValle et al., 2011). The idea is to transfer the experience in tacit form into the employees in the same form. This shall require a level of social interaction rather than strict professional exchanges in the context of consultancy. One of the most effective methods in achieving this is through storytelling. In this case, individuals tell stories about the organization, its leadership and their own experiences at different levels of work. The same tactic is to be employed when spreading information from employee to employee. Storytelling can successfully transfer information from one employee to another in tacit form. 

Critical Success Factors

There are several factors that are critical to the success of the proposed knowledge management strategy. These include:

1. Appropriate application of technology (Big data Analytics)
2. A supportive culture for knowledge management
3. Managerial Support

Justification

Technology is one of the critical success factors in the outlined knowledge management strategy. Particularly, big data analytics shall play a crucial role in the success of the strategy in totality. This is because it cuts across both the codification and the personification strategy. However, it must be appreciated that the use of technology (big data analytics) is more crucial for the codification part than the personification. This is because the handling of huge amounts of data in a meaningful way shall be barely possible without the unending support of big data analytics that shall help in the unearthing of trends and correlations that generate new information (Rohloff, 2009). Without technological application, it would be difficult to transform the codified information into strategic and tactical value. In the same way, the effectiveness of the personification strategy shall be hampered by the lack of normative technology use in connecting people as well as big data analytics in assessing the quality of the information they share. 

Elsewhere, a supportive culture for knowledge management is also needed to a great extent. This is because the capturing and transfer of tacit information is purely based on this enduring culture both between employees and experts and within employees themselves. It was encouraging that employees already appreciated knowledge management and particularly the role of tacit knowledge in the organization but that needed to remain unchanged. With a supportive culture, it would be possible to initiate knowledge sharing as the downsizing progressed and sustain it way after the strategic shift is complete. However, if employees were to alter their attitudes and beliefs towards knowledge management and attendant processes, there would be disruption in the knowledge sharing processes. The codification strategy may also be affected in a way as it also requires the support and commitment of the employees.

At the end, managerial support would also matter. This is because there is need for leadership, moral and technical support in order to realize the knowledge management initiative. The initiative would fail if it was to be left under the sole leadership and management of John Smith, given that he needed funding, stakeholder support and human resource to carry out both codification and personalization. Support was particularly needed with respect to material resources which include funding for the purchase of technologies like big data analytics. These are often costly and are characteristic of capital investments that require managerial sanctioning and financing (Nonaka & Toyama, 2015). The rest of the employees were also likely to respond positively to the knowledge management initiative if the management was to throw their support behind it. It acted as reinforcement on a supportive culture for knowledge management. 

Summary

There were several analytical points emergent from the presented case scenario at Northern Gate (NG). First, the main issue was how to retain knowledge in the air combat systems (ACS) section in the wake of downsizing, where 2,000 employees were to be relieved of their official duties. NG had large amounts of tacit and explicit information to harness and retain in the foregoing, though there was more tacit than explicit information at risk following the impending move. It was also important to note that a knowledge audit carried out by the Delphi group revealed a positive and supportive knowledge management culture in the organization. Consequently, three knowledge management objectives were crafted including coming up with an integrated knowledge management system for handling explicit knowledge, activating knowledge sharing between employees and experts in different knowledge areas and the creation of formal and informal guidelines for sharing knowledge between employees. The proposed knowledge management strategy was to carry out 80% personification and 20% codification. In the latter, there would be a greater investment on big data analytics though the technology applied to both parts of the strategy. The processes related to both parts of the strategy were exemplified in the SECI model, with personification focusing on socialization and codification relying on combination. For the strategy to be successful, there was need to focus on offering technological and managerial support as well as sustaining a culture that supports knowledge management. 

References

Bali, R., Wickramasinghe, N., & Lehaney, B. (2009). Knowledge management primer. New York: Routledge.

Khatibian, N., Hasan gholoi pour, T., & Abedi Jafari, H. (2010). Measurement of knowledge management maturity level within organizations. Business Strategy Series, 11(1), 54-70. http://dx.doi.org/10.1108/17515631011013113 

LaValle, S., Lesser, E., Shockley, R., Hopkins, M. S., & Kruschwitz, N. (2011). Big data, analytics and the path from insights to value. MIT Sloan Management Review, 52(2), 21.

Nonaka, I., & Toyama, R. (2015). The Knowledge-creating theory revisited: knowledge creation as a synthesizing process. In The essentials of knowledge management (pp. 95-110). Palgrave Macmillan UK.

Nonaka, I., Toyama, R., & Konno, N. (2005). SECI, ba and leadership: a unified model of dynamic knowledge creation. Knowledge Management: Critical Perspectives on Business and Management, 2(317), 16-29.

Rohloff, M. (2009). Case study and maturity model for business process management implementation. Business Process Management, 128-142.