long range planning

Long Range Planning 35 (2002) 29-48 www.lrpjournal.com

Managing Knowledge for

Innovation
Richard Hall and Pierpaolo Andriani

This paper describes a technique for identifying knowledge gaps in innovative firms.
Gaps occur between existing knowledge and knowledge requirements and particularly
occur when a firm is trying to introduce new processes or products. The authors were
involved in a knowledge management project in a UK telecoms company and report
on a framework that they developed that assists in examining the dimensions of
knowledge gaps so that they may be bridged. This technique also allows the firm to
measure the vulnerability of its knowledge bases. 쎻c 2002 Elsevier Science Ltd. All
rights reserved.
Richard Hall is Professor of
Operations and Procurement
Strategy at the University of
Introduction Durham Business School. His
Many firms face the challenge of a knowledge gap, where current research interests include:
knowledge is not at a sufficient level. Such a gap is particularly intangible resources, knowledge
noticeable when the firm is trying to introduce a new product or management and supply chain
new process. This article reports on the outcome of a knowledge management. He won the
management research project* in a firm that was addressing internationally contested Igor
innovation. The project developed a technique for managing Ansoff Strategy Award in 1995.
knowledge associated with innovation; it is based in part on the Pierpaolo Andriani acted as
concepts of Boisot’s “Social Learning Cycle”.1 The three main Professor Hall’s research associate
outcomes of the technique are: a risk analysis, an identification from 1996 to 1999. He is now a
of the KM processes which need to be initiated and a vulner- Lecturer in Innovation and
ability analysis concerning strategic knowledge capabilities. Technology at the University of
The total research project comprised the following stages: Durham Business School. His
research interests include the
1 An ex post case study concerning the design and development application of complexity theory
of an innovative power tool. This first case study, which to the dynamics of geographic
resulted in a prototype KM technique, has been described by clusters.
∗
the Authors. The project was funded by the
2 The prototype technique was further developed and tested at a UK government (Engineering &
UK mobile telephone operator on a minor project concerning Physical Sciences Research Council,
Messaging Architecture. Ref. GR/L41509).

0024-6301/02/$ - see front matter 쎻 c 2002 Elsevier Science Ltd. All rights reserved.
PII: S 0 0 2 4 - 6 3 0 1 ( 0 2 ) 0 0 0 1 9 - 5
 3 The third stage, which is the subject of this article, concerned
the validation of the technique on a major General Package
Radio System (GPRS) initiative at the same mobile tele-
phone operator.

This article is concerned with presenting the theoretical con-

cepts which form the basis of the technique and with reporting
the results of the application of the technique in the GPRS pro-
ject.
The approach is characterised with the following features:

앫 The units of analysis. These are the gaps between: the current
“platform” knowledge and the required “target” knowledge,
which have to be bridged in order to produce each desired
innovative feature.
앫 The features used to describe knowledge. These are:

—The nature of the knowledge needed to bridge each gap:

does it exist or has it to be invented? If it has to be invented
is it additive or substitutive?
—The amount of knowledge which is needed to bridge
each gap.
—The nature of the platform and the target knowledge
bases in terms of the degree to which the knowledge is
diffused and codified.
—The relationship between the knowledge held internally
by the project team and the knowledge which exists outside
the team.
—The communities which possess the different knowl-
edge components.

The technique involves managers carrying out analyses inde-

pendently and then sharing their subjective perceptions. This
process, known as perceptual synthesis, generates a productive
dialogue as it provides managers with a language with which to
release their tacit knowledge regarding the challenges inherent in
the innovation. The process resonates strongly with the concept
of “ba” described by Nonaka and Konno2 as: “According to the
theory of existentialism, ‘ba’ is a context which harbours mean-
ing. Thus, we consider ‘ba’ to be shared space that serves as a
foundation for knowledge creation.”
In writing about the nature of knowledge management Daven-
port and Marchand3 suggest that: “Whilst knowledge manage-
ment does involve information management beyond that it has
two distinctive tasks: to facilitate the creation of new knowledge
and to manage the way people share and apply it.”
The research programme was concerned primarily with help-
ing practitioners to identify how knowledge needed to be trans-
formed and shared; it was not concerned with information man-
agement. The authors believe that readers of this article may
receive two benefits: first, new insights regarding the oper-

30 Managing Knowledge
ationalisation of some basic knowledge management concepts;
second, new perspectives afforded by the analysis frameworks
which have been developed.
In addition to providing benefits in a context of innovation
the authors believe that the approach also has potential in the
context of developing new strategic capabilities.

Some theoretical considerations about knowledge

Much has been written in recent years on the subject of knowl-
edge management. Indeed special editions of leading journals
have been devoted to the subject.4 The authors whose work most
informed the approach developed in this project are Nonaka,5
Boisot and Snowden. Central to their work are the concepts of
tacit and explicit knowledge, and additive and substantive knowl-
edge. This section will present the concepts, examples and anal- An organisation’s
ogies which were found to be useful when explaining the
approach to the colleagues and practitioners who were involved culture is an example
in the research project.
of diffused tacit
The main knowledge concepts used in the knowledge
research
The significance of the concept of tacit knowledge was first ident-
ified by Polanyi.6 It has recently received much attention from
those who adopt an “organic” metaphor, as opposed to a “mech-
anical” metaphor, when conceptualising organisations and the
societies within which they operate.7
Tacit knowledge is acquired by experience, by learning by
doing. Tacit knowledge is not codified, it may not be communi-
cated in a “language”, it is acquired by sharing experiences, by
observation and imitation. Prior to the early Middle Ages the
knowledge of music was mostly acquired by experience—one
had to hear the tune. In the early Middle Ages the code, or langu-
age, of the bass and treble clef notation system was devised and
after that the knowledge of music could be communicated easily.
It is not the case that tacit knowledge can never be codified:
whether or not to codify will often depend on the payback antici-
pated from the time and resources which need to be invested
in the codification process. Tacit knowledge may be held by an
individual or it may be diffused throughout an organisation. An
organisation’s culture is an example of diffused tacit knowledge
and an individual’s assimilation of the organisation’s culture is
an example of the transmission of tacit knowledge from a group
to an individual.
Explicit knowledge, unlike tacit knowledge, can be embodied
in a code or a language, and as a consequence it can be com-
municated easily. The code may be words, numbers or symbols,
such as those used in music’s notation system. There is not a
dichotomy between tacit and explicit knowledge: rather there is
a spectrum of knowledge types with tacit at one extreme and
explicit at the other. In the natural science paradigm, knowledge
progresses from personal tacit knowledge, through generalis-

Long Range Planning, vol 35 2002 31

 ations and taxonomies, to models and metaphors and ultimately
to theories which have the power to predict the outcome of
novel phenomena.
Knowledge which is new to an organisation either has to be
invented internally or acquired from external sources. This new
knowledge may add to, complement or substitute the existing
knowledge base. New knowledge may be categorised as either
additive, complementary or substitutive. A child’s new knowledge
of long division in a decimal system adds to its existing knowl-
edge of simple division; a teenager’s new knowledge of calculus
complements its existing knowledge of the decimal system; a pro-
grammer’s new knowledge of the binary system involves substi-
tuting the existing knowledge of the decimal system with a com-
pletely different knowledge system. The substitution of old
knowledge with different new knowledge is described by Noote-
boom8 as a process of discontinuous learning, a process of learn-
ing to do better things as opposed to learning to do things better.

Operational issues relevant to the research

context
While most organisations operate with some tacit knowledge,
there are disadvantages of operating with a predominantly tacit
base. There are strong incentives to make explicit the bulk of an
organisation’s knowledge so that:

앫 The organisation is not vulnerable to knowledge being lost

when employees leave and take their personal knowledge
with them.
앫 The knowledge which the organisation possesses can be dis-
seminated to large numbers of employees over large distances
and used in a wide range of applications.
앫 Theory can be formulated which allows the simulation and
operation of “what if” scenarios and which will indicate
appropriate corrective action to be taken when things go
wrong.
앫 Knowledge may be aggregated in order to allow centralised
decision making.

Notwithstanding these advantages there are certain disadvan-

tages associated with operating with a small tacit knowledge
base.9 While a small tacit knowledge base renders the firm safe
from employees walking away with their personal knowledge the
firm may be vulnerable due to the relative ease with which com-
petitors can identify and copy the predominantly explicit knowl-
edge base. If a large explicit knowledge base is the source of
competitive advantage, as it is with many global companies, then
there is a clear need to protect the knowledge base with intellec-
tual property rights and other legal devices. If, as Grant10 main-
tains, the role of the firm is “… to permit individuals to specialise
… while establishing mechanisms through which individuals co-
ordinate to integrate their different knowledge bases in the trans-

32 Managing Knowledge
formation of inputs into outputs”, then a major challenge for a
knowledge-based firm can be the achievement of an appropriate
balance between the tacit knowledge developed by individuals
and the explicit knowledge needed for effective communication
and integration. An organisation which strives constantly to
codify its tacit knowledge base may find that this process hinders
the development of both organisational routines and communities
of practice,11 which are two of the four processes which Grant12
suggests are needed to integrate specialised knowledge.

The attributes of the analysis technique

Innovative features
A design or development brief should define the features which
A major challenge is
are required in the new product or service. The features which
are defined at the outset may be modified and added to by the
the achievement of
project team as it interprets the brief. For example, an initial
brief may be to: “Develop a supersonic airliner with a capacity
balance between tacit
of 100 passengers and a range of 4,000 miles.” As the plane takes
shape it transpires that a Delta wing structure is most appropriate
and explicit
and the landing attitude of such a plane requires a “droop nose”;
so a droop nose becomes one of the innovative features of the
knowledge
project. The starting point of the KM technique is a definition
of the features which the innovation must possess.

The units of analysis

The units of analysis are the gaps between the current “platform”
knowledge and the “target” knowledge which is required to
deliver each feature.

Categorising the components of knowledge

Boisot’s “I Space” was used to analyse the components of the
platform and the target knowledge bases. The “I Space” model
comprises two dimensions: codification and diffusion. The
model has been adapted slightly so that the diffusion dimension
consists of two parts: one part relating to knowledge held within
the project group and one relating to knowledge which is needed
for the project but which, at the outset, is held outside the project
group. The internal space contains four domains and the external
space contains two. The six components are illustrated in Fig-
ure 1.
There are six components of platform knowledge [P1 to P6]
but only four components of target knowledge [T1 to T4], as in
the case study increasing public knowledge was not an objective
of the project. Project team members were asked to make subjec-
tive estimates of the distribution of platform knowledge over the
six components [P1%, P2%, etc.] and over the four target
components [T1%, T2%, etc.]. A description of the nature of
each of the different components is given below:
The Idiosyncratic Knowledge component relates to tacit knowl-

Long Range Planning, vol 35 2002 33

 Figure 1. The six knowledge components and domains

edge held by an individual or small team within the project

group.
The Specialism component relates to explicit knowledge held
by an individual or small team within the project group. While
it is codified and in consequence easy to diffuse, its diffusion is
restricted; it may be restricted by security or it may be that only
a few people understand the language, e.g. a community of
Java programmers.
The Protocol component relates to explicit knowledge spread
throughout the project group, e.g. a Quality Assurance pro-
cedure.
The Habitual Knowledge component relates to tacit knowledge
diffused throughout the organisation, e.g. automatic organis-
ational response routines which are triggered in emergencies.
The Public Knowledge component relates to explicit knowledge
held outside the project group, this knowledge is needed for the
project but the project team does not have it at the outset.
The External Tacit Knowledge component relates to tacit
knowledge held externally to the project group, this knowledge
is also needed for the project but the project team does not have
it at the outset.

The seven knowledge management processes

Following the identification of the distribution of the platform
and target knowledge components it is possible to consider the
KM processes which must be initiated in order to bridge each
knowledge gap. There are seven knowledge management pro-
cesses. They are illustrated in Figure 2.
The seven knowledge management processes are described
below:

1 Externalisation: This is the process of codification, the trans-

formation of knowledge from tacit to explicit. It is called exter-
nalisation because it involves taking the knowledge out of
the person.

34 Managing Knowledge
Figure 2. The knowledge management process

2 Communication (of Explicit Knowledge): This is the “stuff” of

Information Management.
3 Internalisation is the process of learning by doing, of making
the knowledge second nature, of creating habits.
4 Socialisation involves the communication and possibly
enhancement of tacit knowledge.
5 Locating & Acquiring External Explicit Knowledge New to the
Group: The process of scanning (to locate), accessing, and
acquiring external explicit knowledge.
6 Locating and Acquiring External Tacit Knowledge New to the
Group: The process of scanning (to locate), accessing, and
acquiring external tacit knowledge.
7 Inventing Knowledge New to the Group: The process of inven-
tion, of creating new original knowledge, is usually achieved
by one person or a small group. Initially the new knowledge
is of a tacit nature, e.g. a composer’s first ideas about tune and
rhythm. (In the case study invention was the responsibility of
the project group).

Risk analysis
In addition to the identification of the knowledge management
processes which need to be initiated the technique produces a
risk analysis and a strategic vulnerability analysis for each knowl-
edge gap. Where a knowledge gap has to be bridged with a large
amount of substitutive knowledge there is a higher risk of failure
than when the gap has to be bridged with a small amount of
additive knowledge because the substitutive knowledge requires
the difficult unlearning of old knowledge. The knowledge gaps
may be positioned on an Innovation Plot, see Figure 3.
If, in addition to needing a large amount of substitutive knowl-
edge the consequence of failing to bridge a gap is serious, then
one has identified a risk “hot spot”.

Long Range Planning, vol 35 2002 35

 Figure 3. The Innovation Plot

The strategic vulnerability of key capabilities

When a knowledge base represents a key capability it is possible
to identify two types of strategic vulnerability. If the ratio of tacit
knowledge to total knowledge is low, the capability is “Externally
Vulnerable” because the predominantly explicit knowledge base
can be identified and copied by competitors; the position is
“Internally Safe” because if employees leave then their knowledge
is not lost. When the ratio of tacit knowledge to total knowledge
is high the opposite conditions apply: the position is Externally
Safe because the knowledge is difficult to identify and copy; it is
Internally Vulnerable because employees may leave and take their
personal knowledge with them; see Figure 4.
The analysis technique is not concerned with the mapping of
the total existing knowledge base,13 nor with the way in which
knowledge is integrated into organisational competencies,14 but
with the process of identifying and communicating the nature of
the challenges inherent in bridging the gaps between the current
platform knowledge and the required target knowledge for each

Figure 4. The strategic vulnerability map

36 Managing Knowledge
specific feature. The structure of the technique is illustrated dia-
grammatically in Figure 5.
The GPRS project and the results of the application of the
technique in this context will be described in the next sections.

The research setting

Telecommunications in the UK, as in much of the developed
world, has experienced rapid and radical changes in recent years,
including the following:

앫 From incremental adaptations in response to slowly-evolving

technological trends to a rapid succession of radical changes.
앫 From a business dominated by a tangible asset base with mass-
ive investment in physical network infrastructure, to busi-
nesses dominated by knowledge and innovation.
앫 From cumulative/additive learning processes to substitutive
learning processes which require the unlearning of much
old knowledge.
앫 From long to short product lifecycles and from long to short
concept to market times.
앫 From a low variety of product to a proliferation of product
variety with increasing incompatibility between a slowly
changing infrastructure and a rapidly changing product range.
앫 From a low risk, low uncertainty, environment to a high risk,
high uncertainty, environment.

In 1999 some of the major companies operating in Europe

decided to move some way towards a Universal Mobile Telecom-
munications System (UMTS) by introducing General Packet

Figure 5. The structure of the knowledge management analysis technique

Long Range Planning, vol 35 2002 37


This process of
knowledge sharing
generated productive
dialogues
b
GPRS is a standard for wireless
communications which runs at
speeds up to 150 kilobits per
second, compared with current
Global System for Mobile
Communications of 9.6 kilobits
per second. GPRS is particularly
suited for sending and receiving
both small bursts of data such as
email as well as large volumes of
data.
38
Radio Switching.b The rationale behind the GPRS development
was twofold:
앫 To partially bridge the gap between traditional circuit switch-
ing and UMTS in order to gain knowledge and expertise in
packet switched technology.
앫 To possess a fully operational packet switched network in case
a bid for a UMTS licence was unsuccessful.
The GPRS project constituted an excellent case study for valid-
ating the technique. This was for the following reasons:
1 the complexity of the project resulted in a large number of
features and knowledge gaps;
2 the size of the project team and the variety of the members
meant that the communicability of the different analyses was
well tested;
3 the radical nature of the innovation meant that much of the
new knowledge was substitutive and the risk analysis delivered
immediate benefit;
4 the project team members were highly motivated to trial a
technique which would facilitate the progress of their project.
The research method and the results of the research will be
reported in the following sections.
The research method
The researchers were invited to explain the nature of their
research project at the initial project group meeting after which
eight team members volunteered to participate in the research.
Further explanation of the knowledge management concepts was
given to each of the volunteers who then carried out the analyses
in the presence of a researcher but independently of their col-
leagues. Each person carried out his/her subjective analysis in
terms of how (s)he saw the challenges in the total project from
his/her standpoint. Finally those involved in the process
presented their perceptions to the other members of the project
team. This process of knowledge sharing generated productive
dialogues which resulted in effective action with respect to: risk
avoidance, identification of both the strategic vulnerabilities and
the knowledge management processes which needed to be
initiated.
The validation of the KM technique terminated at this stage.
Time and resources did not allow extended engagement to the
end of the GPRS project.
The researchers fulfilled different roles as the project
developed:
앫 Educator: to impart the concepts of knowledge management
in group sessions.
앫 Coach: to act as a facilitator during the individual analyses.
Managing Knowledge
앫 Observer at the sharing of perceptions sessions, and
앫 Scribe and summariser throughout.

Once the knowledge management concepts had been grasped

the project group members had little difficulty in carrying out
the analyses. It was stressed throughout that there were no right
or wrong answers as the analysts were always dealing in subjec-
tive perceptions. Clearly different specialists had different per-
spectives: much of the benefit was derived from the sharing of
the different perspectives.

The case study findings

The results presented in this section are the results of the man-
agers’ analyses. There are two ways of reporting the results of
the case study:

앫 At the level of individual analyses. This approach is instructive

only if there is a detailed understanding of the technology and
the workings of the organisations involved. or
앫 At the aggregate level to highlight pervasive features, emerging
patterns and common problems.

As many readers will not have detailed knowledge of the tech-

nology the findings will be presented in aggregate form.

The brief
The GPRS innovation involved “technology push”. The project
was triggered by the need to grasp the opportunities offered by
new technologies. The brief which was generated shortly after
the start of the project was:

To be the first network operator to launch a GPRS-based

commercial mobile data service in the UK thereby protect-
ing and gaining market share, reputation and profits. The
solutions generated must be scalable and the service should
represent the first step in the evolution of 3rd generation
telecommunications.

The innovative features

The features generated at the start of the GPRS project covered
a variety of aspects; many were concerned with the changes
which would be required in management practice to develop,
implement and operate the new systems; issues such as com-
munication, co-ordination, etc. The main features were:

Features to do with Integration

앫 A redefinition of the company’s internal architecture around
the new set of competencies required by GPRS. Thus two
innovative features were:

Long Range Planning, vol 35 2002 39

 New procedures and increased cross-functional integration.

An initial absence of established practices.

앫 A redefinition of the value chain orientated around the new

central role of IT suppliers, software developers and internet
companies. This represented a change in the traditional oper-
ations of telecommunications industry. Innovation now
required the management of a network of suppliers and exter-
nal resources. Thus an innovative feature was:

Innovation achieved by means of a network of interdependent

suppliers.

Features to do with services

앫 The new technology creates new markets with new users of
new services. Thus an innovative feature was:

The new product will comprise a new package of value-added ser-

vices.

Features to do with technology

앫 The new technology transforms the concept of a telephone
call. With the new protocol the user is always connected, as
a consequence tariffs can be volume-based instead of time-
based. Thus two innovative features were:

A totally new billing system.

Always connected, always on line.

Features to do with the business model

앫 The new technology impacted the fundamental business
rationale. Thus an innovative feature was:

A new self image: are we a telephone company, an integrated service

provider, or an internet server?

The knowledge gaps

Each feature generated knowledge gaps. For example the feature
“Always connected, always on line” generated the following
knowledge gaps which had to be bridged:

앫 Switched virtual circuit: No longer a call, but a context

앫 New core network (TCP/IP)
앫 Understanding how new services based on new core network
capabilities will be used by customers.

40 Managing Knowledge
Figure 6. The Innovation Plot

The nature of the innovation and the risk

analysis
The risk hot spots concerned knowledge gaps that required a
large amount of new knowledge which was of a substitutive nat-
ure. These gaps are usually characterised by a small amount of
platform knowledge. Typically much of the target knowledge had
to be invented, sometimes with the additional difficulty of
unlearning familiar internalised tacit knowledge. The Innovation
Plot shown in Figure 6 indicates 14 knowledge gaps which have
a degree of risk.
If, in addition to a gap being risky, the consequence of failing
to bridge the gap is serious, then a risk hot spot has been ident-
ified. Three examples are given in Table 1. Table 1 also shows
the elements of knowledge which had to be unlearned, typically
these concerned the elements of technological knowledge that
characterised telecom industry in the previous era. Unlearning

Table 1. Examples of risk hot spots

Innovative Associated Unlearning Failure Risk

Feature Knowledge
Gaps

Probability Consequence score:

score: Low 1, High 5
Low 1, High 5

Data volume Time-based vs Link between price 4 4 16

based tariffing volume-based and time
billing
Existing billing system
Quality of services What do we Existing quality of 3 4 12
measure and services metrics
how?
Always connected, TCP/IP network Circuit switched 2 5 10
always on line telephone theory
Existing platform

Long Range Planning, vol 35 2002 41

 Figure 7. Innovation Plot of process knowledge gaps

some of this old knowledge meant abandoning established prac-

tices and routines.
In the GPRS case study most of the risk hotspots were associa-
ted with process gaps. It was interesting to find that even in a
project dominated by “hard” technology most of the learning
challenges were connected with “soft” process issues.

The nature of the knowledge gaps

The knowledge gaps identified may be divided into two categor-
ies:

앫 Gaps to do with process issues, e.g. communication, relation-

ships, and other management issues.
앫 Gaps to do with content issues, e.g. inventing and
implementing a new technology.

The distributions of these two types of knowledge gap, i.e.

process and content gaps, on the Innovation Plot are shown in
Figures 7 and 8.
The content and process knowledge gaps were also analysed

Figure 8. Distribution of content knowledge gaps

42 Managing Knowledge
in terms of the explicit/tacit content of the required target knowl-
edge. The analysis is presented diagrammatically in Figure 9.
The bulk of the content target knowledge bases comprised
explicit knowledge, whereas almost half of the process target
knowledge bases comprised tacit knowledge such as that to do
with new ways of behaving. This meant that much of the new
knowledge associated with bridging the process gaps had to be
acquired by a time-consuming process of socialisation.

Analysing the platform and the target

knowledge bases
Figure 1 illustrated how a knowledge base could be analysed in
terms of codification and location, specifically in terms of the
four components: “Idiosyncratic Knowledge”, “Specialisms”, “Pro-
tocols” and “Habitual Knowledge”. In the case study described
here there was little external platform knowledge to be located
and acquired as the project group was a network of collaborating
companies which held most of the required platform knowledge.
The practitioners who participated in the research had little dif-
ficulty in making subjective estimates of the distribution of
knowledge components and in assigning proportions to the
components for both the platform and the target knowledge
bases. In view of the subjective nature of the analyses there was
not always agreement but the differences usually produced a pro-
ductive dialogue resulting in a better mutual understanding.
A comparison of the distribution of the knowledge compo-
nents of the platform knowledge base with the distribution of
the components of the target knowledge base (Figure 1) allowed
the identification of KM processes which had to be initiated
(Figure 2).
The composition of both the platform and the target knowl-
edge bases in terms of the four categories of knowledge compo-
nent is represented graphically in Figure 10.

Figure 9. A comparison between the tacit and the explicit proportions

of content and process target knowledge bases

Long Range Planning, vol 35 2002 43

 Figure 10. Components of platform and target knowledge bases

The front row of columns shows the knowledge components

of the platform knowledge, the back row shows the components
of the target knowledge.
The bulk of the platform knowledge was identified as residing
in the Idiosyncratic Knowledge and the Specialisms components;
i.e. undiffused knowledge. In contrast much, but not all, of the
target knowledge base was envisaged as diffused knowledge. This
result is not surprising as all the project managers were specialists
and it follows that a major challenge of such a project would be
concerned with diffusing some of their specialist knowledge so
that effective co-ordination and integration was possible.
The composition of the platform and the target knowledge
may be represented in terms of diffusion and codification; Fig-
ures 11 and 12.
Figure 11 confirms the previous finding that the platform
knowledge is almost entirely undiffused, the knowledge is con-

Figure 11. Diffusion analysis

44 Managing Knowledge
Figure 12. Codification analysis

centrated in the individual experts’ heads or in their records;

while the target knowledge indicates a need to diffuse much, but
not all, of the platform knowledge. The analysis shows that pro-
ject team members anticipated that approximately one third of
the specialists’ knowledge should stay with them.
Figure 12 shows the significant increase in codification which
was needed to facilitate the knowledge diffusion. Whilst there
were areas where invention was needed, particularly with respect
to some of the new substitutive knowledge, the main knowledge
management processes which needed initiating were codification
and diffusion.

The knowledge communities

A key part of the analysis was the identification of which com-
munity owned which component of knowledge. This in turn
allowed the identification of the communities which needed to
share their knowledge and those which needed to acquire it. In
the case of incremental innovation involving new additive knowl-
edge these communities mapped on to the existing organisational
structure; however, where the nature of innovation was more
radical the relevant communities were more difficult to identify.

The strategic vulnerability analysis

This analysis aims to identify those important knowledge bases,
i.e. capabilities, which are either internally or externally vulner-
able. Figure 13 shows the strategic vulnerability plot for both the
platform and the target capabilities associated with risk hot spots.
The positions of the platform capabilities are indicated by the
boxes containing the descriptions and the positions of the target
capabilities are indicated by the circles.
The plots illustrate three types of movement from platform to
target positions (from box to circle):

Long Range Planning, vol 35 2002 45

Figure 13. The strategic vulnerability of capabilities which are risk hot spots

앫 Predominantly from right to left; this indicates a need to

reduce the tacit content, i.e. a need to codify knowledge.
앫 Predominantly from bottom to top; this indicates a need to
acquire more external explicit knowledge.
앫 From both right to left and bottom to top.

There is no case where an increase in tacit content is envisaged.

This analysis identifies the need for some external codified
knowledge (new to the group) to be acquired and it confirms
the results of previous analyses concerning the need for existing
tacit knowledge to be codified so that it can be diffused.
Six of the seven target capabilities shown in Figure 13 lie in
the upper left-hand quadrant; as a consequence they may be
externally vulnerable as the largely explicit knowledge base may
be relatively easily identified and copied. On the other hand they
are internally safe as employees leaving would not take irreplace-
able tacit knowledge with them. While it is clear that these capa-
bilities should be protected with intellectual property rights,
ownership issues can be difficult to establish when the innovation
involves the collaboration of a number of different companies.
This was so with this case study and we observed considerable
management attention to this issue.

Summary and conclusion

The messages which emerged from this case study were as fol-
lows:

46 Managing Knowledge
앫 While the independent subjective analyses carried out by dif-
ferent individuals produced a variety of perceptions the variety
did not pose a problem as the dialogues which ensued when
the perceptions were shared were productive.
앫 The identification of substitutive categories of new knowledge,
allied to wide knowledge gaps and serious consequences of
failure resulted in the identification of risk hot spots.
앫 Many of the challenges identified were associated with process,
as opposed to content issues.
앫 The KM processes which needed to be initiated were largely
concerned with codification and diffusion, i.e. with integrating
specialists’ knowledge into the organisation.
앫 Notwithstanding the significant need for codification and dif-
fusion it was recognised that not all the experts’ knowledge
should or could be codified and diffused. Many of the
앫 The codification which was needed to facilitate diffusion had
the tendency to increase external vulnerability. The vulner- challenges identified
ability of the new capabilities created by a network of suppliers
resulted in a need to address complex knowledge protection were associated with
and exploitation issues.
process rather than
Since the completion of this case study the analysis technique
has been incorporated in softwarec which has been tested with content issues.
a group of 18 practitioners. The results of this subsequent work
indicate that the technique can deliver benefit in areas of sophis-
ticated innovation, such as that witnessed at the telecommuni-
cations company, but is considered to give insufficient payback
in less sophisticated situations.

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48 Managing Knowledge