Ask a group of senior executives
if they regard knowledge management as very important to the success of
a company. Most will enthusiastically say that they do—a response befitting
one of the trendiest topics in management circles.
Yet thinking that knowledge management is crucial and knowing what to
do about it are very different. A McKinsey survey of 40 companies in Europe,
Japan, and the United States showed that many executives think that knowledge
management begins and ends with building sophisticated information technology
systems.
Some companies go much further: they take the trouble to link all their
information together and to build models that increase their profitability
by improving processes, products, and customer relations. Such companies
understand that true knowledge management requires them to develop ways
of making workers aware of those links and goes beyond infrastructure
to touch almost every aspect of a business.1
Because knowledge management is an increasingly essential component
of innovation and value creation, we focused on two tasks—product development
and order generation and fulfillment—as a way of identifying which companies
in our survey were good knowledge managers. These tasks are the major
contributors to the value a company generates. By using process performance...