The task of the knowledge managers in the organization is to stimulate and lead workers to create knowledge needed by the organization for its current activities and functions and fulfill and achieve organization‘s goals in the future. To do so, the managers should be aware of the goals themselves, the knowledge need to achieve them, the existing knowledge in the organization and the lacking knowledge. The knowledge gaps can be filled in by acquiring knowledge from external sources or by creating it within organization. To make a decision how to make up the lacking knowledge, the manager needs to predict the possible outcome of in-house knowledge creation process. The following chapter will describe the model which can measure the outcome of knowledge creation process and help in making the decision.
1. Evolutionary theory and knowledge creation
Evolution is defined as the change in the inherited traits of a population of organisms through successive generations. This change results from interactions between processes that introduce variation into a population, and other processes that remove it. The main source of variation is mutation, which introduces genetic changes. These changes may give rise to alternative traits. Another source of variation is genetic recombination. Variation can be increased by the transfer genes between species and, very rare but significant, wholesale incorporation of genomes through endosymbiosis (Futuyma, 2005). Darwin‘s theory sees evolution not direct but random as a result of natural selection. Discoveries in science happened by accident can be explain by this. These are big and dramatic changes that advance the existing knowledge that hardly can be planed, controlled or managed. This is a powerful but unmanageable process. Lamarckian theory sees the individual efforts of species as a key for changes of traits which can be later passed to the offspring (Gould, 2002). Focused efforts of people to create new knowledge and later to share and to apply it can be seen as an analogy
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to this process. Crossbreeding is used as a tool to transfer genes between species and create a new species with the desirable traits. Crossbreeding and individual efforts can be applied by the managers in the organizations to create new knowledge.
Similar to the evolutionary theory, this research assumes that knowledge can be created by joint effect of combination and mutation, and it is taken that combination occurs first and mutation next. Since combination leads to less dramatic changes than mutation, knowledge created by combination can be seen as incremental changes of knowledge, at the same time, knowledge created by mutation is seen as radical changes of knowledge. The former is quantitative increase; the latter is qualitative increase of knowledge. Increasing efficiency of automobile engine can be seen as quantitative incremental changes in automobile industry knowledge, while using hybrid or electrical engines as qualitative radical changes. Figure 6 describes the schematic way of knowledge creation from the perspectives of combination and mutation.
Figure 6 Creation of New Knowledge by Combination and Mutation
Among all existing organizational and individual knowledge, managers should identify and recognize indispensible knowledge that gives uniqueness and competitiveness to the organization. Indispensible knowledge that individuals posses in the organization should be gauged, so managers would know from whom the organization can get knowledge needed, where important knowledge is located and how it is allocated in organization. This gauging
Combination
Mutation New knowledge
Old knowledge
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can be based on working experience, certificates and patents, educational background, skills, previous performance, etc. Hereafter this indispensible knowledge will be specified as ‗OLD knowledge‘. Manager participates in the knowledge management process as a breeder in such a way that, similar to the breeder who wants to create new species with the desirable features, and chooses appropriate animals so they offspring will have these features, chooses appropriate worker who can transfer his or her knowledge to another worker who lacks it for the knowledge creation process. Obviously not all set of knowledge that person A posses is necessarily needed by person B for conducting the knowledge creation process. Knowledge which person B needs from person A is specified as A1, and knowledge which person A needs from person B as B1.
After finding appropriate workers and defining knowledge they need, knowledge must be transferred from person A to person B. Willingness and ability to share knowledge of person A and to receive knowledge of person B will influence this process. Not necessarily person A wants to share knowledge, or he or she can find it difficult to express knowledge and to make it understandable for person B, etc. On the other hand, person B can be unable to acquire knowledge shared by person A due to the lack of experience, rigidity of thinking, being not sure about person‘s A competency, etc. Ability to share (to teach) and to receive (to learn) knowledge also depend on the mutual trust between workers, their background and experience in knowledge transferring, existence of common goals and beliefs, etc. Knowledge received by person B from person A can be expressed as:
B A A
B
A S R
K
1
(1) where A1 is knowledge which person B needs from person A,SA is ability of person A to share knowledge, and RB is ability of person B to receive knowledge.
It is needed to be noted that when person B needs not only one particular knowledge type from person A but a set of knowledge then equation (1) is applied to every knowledge type from the set of knowledge that is needed to be received by person B.
One of the most important factors for the knowledge creation process is the person‘s knowledge creation ability (hereafter KCA), the ability to create new knowledge from existing and available knowledge, because in reality, some people are able to create something new
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while others can only learn and acquire existing knowledge. KCA can be attributed to individual creativity, versatility, ability to generate new ideas, past experience of person, having knowledge in different knowledge area, etc. Knowledge creation ability is an ability to avoid so called ‗fast-food thinking‘, the standardized and predictable thinking. In many cases, people do what they are expected to do and choose generally accepted point of view or be afraid to express their ideas if they go across established patterns. However, these unusual thoughts and ideas are often predecessors of innovations and inventions. As Einstein said: ‗We can't solve problems by using the same kind of thinking we used when we created them‘, KCA can be also influences by pressure that person is facing from working environment. Sometimes people with high knowledge creation ability can be inefficient and not productive when put into time or/and space constraints.
Probability of mutation or combination existing and available knowledge into a new one will be also influenced by difference between knowledge areas of two persons. The bigger the difference between knowledge areas of persons, the higher the probability of mutating existing knowledge and the lesser the probability of combining the existing knowledge is. However, knowledge from totally different areas can‘t be compound together even through mutation, as they must share common boundaries or have some connections. These connections can be hidden and not obvious. Similar to the evolutionary theory, it is considered that probability of creation knowledge by combination is higher than probability of creation knowledge by mutation, but the outcome of the former will be much smaller than the outcome of the latter.
Combination occurs more often than mutation. By analogy, incremental changes in knowledge area happen more often than radical changes. For example knowledge from anatomy combined with knowledge from automobile industry result creation of cars that are more comfortable and safe for people, putting together knowledge from very different area like electronics, biology, material science has led to radical changes in knowledge area and emergence of new discipline – bioelectronics. Figure 7 represents schematically the difference of knowledge areas.
Knowledge created by person B using a combination can be described as Equation (2) and it can be seen that the amount of new knowledge that person B can create relies on the knowledge received from person A, plus the interaction of person B‘s existing knowledge and person B‘s knowledge creation ability.
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A
(a) different (b) small
similarity
(c) same A
B
A
B
B
Figure 7 Difference of knowledge areas
The knowledge received and the knowledge created based on the existing knowledge will be further fused together to create new knowledge, and again, this will depend on the person B‘s knowledge creation ability and the combination coefficient.
c A KC c
KCA OLD
(K
NEW
KBc
BA
B
B )
B
(2) where KBA is knowledge received by person B from person A,OLDB is existing indispensible knowledge of person B, KCAB is person B‘s knowledge creation ability,
c is combination coefficient.
Knowledge created using mutation by person B depends on the interaction of knowledge received from person A and knowledge creation ability of person B, raised to the power of mutation coefficient. Person B‘s existing knowledge together with the mutation coefficient will next jointly produce compounding effects. Knowledge created by person B using mutation is denoted by Equation (3). Figure 8 gives a visual interpretation of the knowledge creation process by combination expressed by Equations (1) and (2).
m OLD
A KC (K
NEW
KBm
BA
B 1m
B
1
)
(3) where KBA is knowledge received by person B from person A,OLDB is existing indispensible knowledge of person B,
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KCAB is person B‘s knowledge creation ability, m is mutation coefficient.
Figure 8 Knowledge Creation Process Using Combination
First, person A shares a portion of knowledge A which person B needs to acquire for 1 knowledge creation process. This phase depends on the nature of knowledge A which is 1 transferred, ability of person A to share knowledge and ability of person B to receive knowledge. While acquiring knowledge from person A, person B selects a part of his or her existing knowledge that can be combined with knowledge A according to his or her 1 knowledge creation ability and combination coefficient. Through the process of knowledge transferring, person A and person B not simply passes knowledge A (or part of it that will be 1 acquired by person B), but also conduct communication between them. Communication is very important as most ideas emerge during the communication. The other mission of knowledge transferring is to stimulate memory of person B, as during this process he or she will reorganize existing knowledge accordingly to acquire new knowledge from person A.
Some ideas which are in the stage of incubation period in person B‘s mind can be released and used for the current process of knowledge creation or be a starting point of the other knowledge creation activity. The process of combining received knowledge and selected existing knowledge and transforming them into new knowledge will be again affected by
Process of combination
B
B KCA
OLD
B selects knowledge he has according to his creativity and combination coefficient.
Process of transferring knowledge
A1A1SARB
c
New knowledge A1
OLDB
KCABcPutting together
knowledge received from A and suitable
knowledge of B
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person B‘s knowledge creation ability and combination coefficient. Combination coefficient shows the probability of creation of new knowledge form the existing sets of knowledge and newly available sets of knowledge after fusing these sets and possibility of the fusion by itself.
2. Time and cost of creation of new knowledge
For the organization, it is important to predict not only the possible outcome of the knowledge creation but also to predict time and cost of the process. A mission of the knowledge creation process is to enrich the organization with knowledge that in consequence will bring competitive advantage to the organization. If the knowledge creation process will take too long, the new knowledge might be outdated and useless for the organization or uncompetitive. Though, there is no guarantee that knowledge that is created faster will be more useful for the organization. It is the task of the manager to make a decision and to implement it the best way. Cost component of the knowledge creation process is very important too. If the creation of new knowledge is more expensive than the potential value of new knowledge, then the organization will not gain but suffer from this process. Therefore planning and predicting the outcome of the knowledge creation process, its time and cost factors are aimed to help managers to keep the knowledge creation process under time and budget constraints.
Time component of the knowledge creation process is complex by itself and depends on many factors that determine how much time one needs to create new knowledge. Among them:
amount of existing knowledge of person and amount of new knowledge available to person, learning ability and willingness to acquire new knowledge of person, nature and complexity of knowledge person is operating, and available technologies that can be applied for the knowledge creation process. Persons with equal ability to acquire new knowledge will need a different time span to create the same amount of knowledge if amount of their existing knowledge is different. Obviously, one with the large amount of existing knowledge will generate knowledge faster. Persons with the different knowledge creation ability, under the same conditions, evidently will create different amount of new knowledge if spending same time for knowledge creation. Time needed to create new knowledge also depends on quality of knowledge transfer. By turn, knowledge transfer process will span longer if the physical distance between persons will hinder communication; difference between knowledge areas of persons will make them spend time to look for patterns or conceptions understandable and
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convenient for both of them; knowledge gap between persons in the same knowledge area will slow down comprehension of the person who‘s depth of knowledge is lesser. Considering above mentioned, time needed to create new knowledge by combination and mutation can be expressed as Equation (4) and Equation (5) respectively.
( 1 )
( )2
c f NEW KCA D
R S
d
T G
AB KBcB B
A
AB AB
c
1
( ))
( 2
m f NEW KCA D
R S
d
T G
AB KBmB B
A
AB AB
m
where G is the knowledge gap between person A and person B in the same knowledge area, AB
d
AB is the physical distance between persons A and B,DAB is difference between knowledge areas of persons A and B,
c
NEW and KB NEW is knowledge created by combination and mutation respectively, KBm )
(c
f and f(m)are functions of combination and mutation variable respectively, which denotes complexity of new desired knowledge, and
is weight between ability to share and ability to receive.
Time needed to transfer and create new knowledge is proportional to the squared sum of the physical distance between persons and the knowledge gap between persons, as it will affect personal communication. Certainly, the bigger the knowledge gap between two persons, the longer the time required to transfer knowledge, since the person with a lower level of knowledge will need more time to understand the one with a higher level of knowledge. Time is also proportional to difference between knowledge areas of persons, newly created knowledge and complexity of this knowledge. The more complex new desirable knowledge is and the bigger the amount of this knowledge the more time one needs to spend for its creation.
Time needed for the knowledge creation process is inversely proportional to the knowledge creation ability of person, sharing ability of the source of knowledge and receiving ability of the knowledge receiver. Evidently, the higher is knowledge creation of person the less time he or she will need for the knowledge creation process. Furthermore, the ability to learn (receive the knowledge) is even more important than the ability to share knowledge during the knowledge transferring process, because even if the knowledge is explained to the receiver (4)
(5)
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completely and clearly, if he or she is unable to comprehend it entirely, the process of transferring will still not be completed. Above mentioned factors have big influence on knowledge transfer process, and it is believed that knowledge creation process occurs in person‘s mind while acquiring new knowledge, ideas and patterns describing new knowledge will be formed in relatively short time, further crystallizing of them will depends on the complexity of desirable new knowledge.
It should be noted that the physical distance between persons and the difference between knowledge areas of persons are equivalent but the knowledge gap between persons is inverse.
Using signs form Equations (4) and (5), it can written as:
d
AB d
BA , DAB DBA butBA
AB G
G 1 .
In general, creating knowledge by mutation will require longer time than creating knowledge by combination. In some cases creating knowledge by combination can require longer time than creating knowledge by mutation due to the great amount of knowledge and information need to be processed during the process of creating knowledge by combination.
Cost component of the knowledge creation process depends on time spent for this process and cost of organizational structure, technologies, human and equipment sources involved into the process. If justifying of new knowledge needs experiments with involving various equipment, departments and technologies, it will increase cost of the process as well as the time required for it. Technologies used will depend on the type of the new desirable knowledge and will wary in different organizations and different industries. High-tech industry for sure will require more advanced tools than traditional industries. Cost of the knowledge creation process can be expressed as Equation (6).
T
cT
mC
(6) where T and c T is time needed to create knowledge by combination and mutation mrespectively,
is the cost factor, and its value is related to the organizational structure, technologies, human and equipment sources.
The proposed model can be used as a tool by managers when planning knowledge creation process and making decisions about knowledge management strategy. Quantitative
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measures of the knowledge creation process bring more evidence and make simpler the evaluation of the process and its outcome. This model considers important factors of the knowledge creation process and treats this process from the perspectives of evolutionary theory. For knowledge managers, it is important to be able to predict outcome of the knowledge creation process, time needed for it and its cost. Having these key characteristics of the knowledge creation process at their disposal will let them rationally utilize organizational resources; make the organization more efficient, effective and competitive.
Quality of new created knowledge and its compliance with desirable knowledge needs additional evaluation, analysis and correction if needed. The knowledge creation process and its results can be compared to light, with visible and invisible spectrum, besides expected and predictable (visible) results, it, for sure, will have some unpredicted and unexpected outcomes which can be easily overlook if one doesn‘t pay attention to or is unaware of them. It is important to utilize all created knowledge and look for not evident outcomes of the knowledge creation process, as it can be more valuable than expected one.
After completing knowledge creation activity, over time, personal and organizational knowledge may change and re-gauging of person‘s indispensible knowledge will be needed.
Knowledge creation ability of person, his or her ability to share and to receive knowledge might change as well. Therefore knowledge manager should not only plan the knowledge creation process and see and evaluate its result, but also to trace it from the beginning to the end, noting which factors of the process have the biggest influence in the organization.
3. Implementation algorithm I
The following section will provide an algorithm of how to use the described model and predict the possible outcome of the knowledge creation process. Consecutive steps from the identification of persons available to choose from by knowledge manager through further knowledge creation process to predicting amount of created knowledge, time and cost needed to create this knowledge. Before conducting the knowledge creation activity, manager should be aware of the goals he or she wants to achieve and determine the desirable new knowledge.
All gauges should be made in compliance with desirable knowledge.
Step 1. If predicting the outcome of the knowledge creation process is used for the first time, then gauging individual‘s indispensible knowledge. If algorithm was used before, re-gauging is needed to keep data up-to-date.