Project Management Institute

Balancing the long and short-term knowledge requirements of a project-based organization--determining the knowledge of contribution required for a project

Introduction

Knowledge management has become one of the newest buzzwords in organizations. Everyone knows that growing knowledge is a way to ensure organizational success. Especially in Knowledge Intensive Technological Organizations (KITOs) the need exists to ensure that the knowledge that is generated by projects is not lost when individuals leave the organization or move on to other areas. This presents a whole new challenge for the project manager of the 21st century.

Most project managers are expected to maximize the profit on any given project. This can often come at the expense of capturing, sharing, and transferring knowledge, as making all the tacit knowledge generated on a project explicit can be expensive and thus erode the project profit.

The big problem facing any project manager is to determine which knowledge developed by the project should be explicitly captured and which knowledge can remain tacit. It is usually not cost effective, necessary, and time efficient to explicitly capture all knowledge generated on a project. Project managers need a tool to help them determine what project knowledge should remain tacit and what knowledge needs to be explicit.

Project managers have to perform a delicate balancing act to ensure that the percentage knowledge applied on the project compared to the percentage knowledge grown on a project are in balance. Projects rely on the knowledge base created by past projects and must contribute to the knowledge base for future projects.

The CSIR is a South African organization that was created to do scientific and industrial research. At Defencetek we focus on military research. As such we are a KITO, which is an organization that embraces Strategic Management of Innovation as a core business process, applying 4th generation R&D principles to the manner in which research and development is conducted.

Characteristics of a knowledge organization include:

•   Strategic management of relationships, knowledge workers, and diversity

•   Culture of collaboration, team-based, sharing, and collaboration

•   Process orientation, management of world-class differentiating competences

•   Efficient, effective, dynamic, flexible, and focused

•   Encouragement of entrepreneurial behavior

•   Empowerment of knowledge workers who have strong commitment, loyalty, and ownership

•  Decentralized decision-making at an operations level, with clear strategic direction and leadership for the whole organization. The problem of knowledge management is however faced in most project-based organizations. This paper presents a tool developed at the CSIR to help project managers maximize organizational knowledge while meeting the other objectives of the organization at the same time.

Developing a Project Knowledge Management Plan

The knowledge management plan must be drawn up with the project team. Apart from the benefits gained for the management of knowledge this also helps to clarify the project in the minds of the team members.

The development of the knowledge management plan should be started as soon as project planning starts. The first few steps in the process of developing the knowledge management plan, help the project team to understand the value that the project will add to the client, and the knowledge that is to be generated by the project. We have found it helpful to go through these first steps before completing the project Work Breakdown Structure (WBS) as determining the value outputs and the knowledge elements help the team to focus.

Exhibit 1. Example Knowledge Management Plan

Example Knowledge Management Plan

A subset of the knowledge management plan developed for the SAR project at Defencetek is shown in Exhibit 1 as an example. The knowledge management plan consists of three columns. The left column addresses application of the existing knowledge base, the middle column deals with the project goal and activities, and the right column addresses elements pertaining to growing the knowledge base.

The process for drawing up a knowledge management plan is shown in Exhibit 2. The process might look daunting but a lot of the elements consist of actions that are taken during the normal project management process.

Determine Project Goal

Determine the goal of the project and formulate the goal in one brief sentence. This goal is a very important mechanism to communicate the project vision to the project team.

Determine Project Beneficiaries and Rate

The project beneficiaries are a subset of the project stakeholders. Stakeholders include all parties that will be influenced by the project. Beneficiaries however define that subset of the stakeholders that will directly benefit from the project deliverables. These are the parties for whom the knowledge will be applied and to whom value will be added.

Beneficiaries include not only current clients but also future clients. The list of beneficiaries normally also does not include the performing organization as it is assumed that the value added to the performing organization will be the knowledge gained.

The beneficiaries are then given a score between 1 and 5, where 5 signifies the highest importance, according to how important it is to satisfy their needs with the project deliverables.

Determine Project Objectives

The next step is to determine the high-level project objectives. One can also skip this step and try and determine the knowledge elements and value outputs directly, but we have found that it is more intuitive for project teams to first determine the project objectives and then derive the value outputs and knowledge elements from there.

It is important to keep the objectives at a relatively high level.

Determine Knowledge and Value Added Per Objective

In order to further clarify the objectives, list the reasons why the objective is important. Then decide what the knowledge elements and value output for each objective is.

Value outputs are the value that the application of the knowledge base by the project will add to the beneficiaries.

The knowledge elements to be defined are those knowledge elements that are needed in order to successfully complete the project.

During this process, objectives that were not previously thought of might be identified. It will then be necessary to update the previously compiled list of objectives.

An example of how to determine the value outputs and knowledge elements from objectives is shown in Exhibit 3.

Draw Structure of Knowledge Base to Determine Missing Elements

Once all the knowledge elements have been identified, it is useful to draw a diagram to illustrate the interactions between the different knowledge elements. This gives the project team a clearer picture of the knowledge elements required and helps to identify any elements that might be missing. An example is shown in Exhibit 4.

Determine How Knowledge is Captured

The next step is to determine how the knowledge that will be generated by the project will be captured, transferred, or shared. This is normally done in documents, software, workshops, mentoring or models. The decision can also be taken that the knowledge is to remain tacit. In this case, the person that will have this tacit knowledge should be identified.

Draw up Project WBS

The project team is now ready to draw up the project WBS. All the normal procedures for drawing up a WBS are applicable.

More capturing, transferring, and sharing activities that are needed for the project might be defined when drawing up the WBS. These activities should be added to those previously defined.

Populate Knowledge Management Spreadsheet

Using all the information developed to date, populate the knowledge management spreadsheet as follows:

•   List the beneficiaries to the right of the applying the knowledge base column, followed by their ratings.

•   List the value outputs in the applying the knowledge base column.

•   Insert the project goal in Block A.

•   Insert the high-level WBS in Block D.

•   List the knowledge elements in the growing the knowledge base column (Block C).

•   List the form in which the knowledge is to be captured as well as the name of the document, model, software, or person.

Determine Importance of Each Knowledge Element

Rate the importance of having each knowledge element for the successful completion of the project with a value between 1 and 5.

Complete Matrix 1 to 4

Complete matrix 1 by allocating a number between 0 and 3 to each value input per beneficiary. Decide how important each value output is to each beneficiary in order to determine the number. In the example shown in Exhibit 1, the client having technological awareness of SAR is equally important for both beneficiaries whereas the product alternatives are only important to the SANDF.

Exhibit 2. Process for Drawing up a Knowledge Management Plan

Process for Drawing up a Knowledge Management Plan

Complete matrix 2 by shading the cell where the knowledge element and the place where it is to be captured intersects. Note that it is acceptable for the knowledge to remain tacit if it has a low value of importance.

Complete matrix 3 by determining to what extent each WBS item satisfies each value output. A value between 0 and 3 is allocated. Complete matrix 4 by determining to what extent each WBS item satisfies each knowledge element. A value between 0 and 3 is allocated.

Note that some tasks do not influence either the value or the knowledge but simply have to be done. In the example, WBS item 2.8 “Ensure safe environment” does not contribute to the knowledge or the value but has to be done in order to avoid legal liability.

Perform Checks

Perform the following checks to ensure that the spreadsheet has been correctly completed:

•   Check if each value output has a WBS activity

•   Check if each knowledge element is captured

•   Check if each knowledge element has a WBS activity of the correct type.

Exhibit 3. Determine Knowledge and Value From Objectives

Determine Knowledge and Value From Objectives

Determine % Growing and % Applying the Knowledge Base

The pie chart in Block A gives a quick indication of how the application of the knowledge base and the growing of the knowledge base is divided for the project. It is possible to make a first order estimation when one starts to draw up the knowledge management plan. However, the value can be much better estimated once the knowledge management plan is complete.

Spreadsheet Calculations and Interpretation

The values of all the importance indicators are between 0 and 1. The closer the value is to 1 the more important the indicator.

Importance of value outputs is an indication of how important the value output is given the importance of the beneficiaries and of the value outputs. This value can be used by the project manager to determine whether the project should be planned to satisfy this value output. The importance of value outputs is calculated as follows:

(Σ Beneficiary rating n * Value Output Rating)/ (Σ Beneficiary rating n) normalized to 1 by dividing by 3.

Activity importance in applying the knowledge base is an indication of how important the activity is in satisfying the value outputs. In the event that project activities need to be cut, activities with the lowest values should be considered first. If an activity has a very low importance value or an importance value of 0 it must be carefully considered whether the activity should be undertaken. This indicator is calculated as follows:

(Σ Importance of value output * Importance of activity for value output)/ (Σ Importance of value output) normalized to 1 by dividing by 3.

Activity importance in building the knowledge base is an indication of how important the activity is in satisfying the knowledge elements. In the event that project activities need to be cut, activities with the lowest values should be considered first. If an activity has a very low importance value or an importance value of 0 it must be carefully considered whether the activity should be undertaken. This indicator is calculated as follows:

(Σ Importance of value output * Importance of activity for knowledge element)/ (Σ Importance of value output) normalized to 1 by dividing by 3.

The project manager is now enabled to balance the activities that are important for applying the knowledge base with those that are important in terms of growing the knowledge base as the importance of the activity is now quantified for each scenario.

Conclusions

The tool for developing a knowledge management plan described in this paper has been found very effective at Defencetek. The tool has been used on several projects to date. Project managers now feel more empowered to make effective decisions in terms of project knowledge management as the importance of the different issues are now better quantified.

Exhibit 4. Structure of the Knowledge Base

Structure of the Knowledge Base

The tool ensures that the project knowledge risks are reduced by early identification of knowledge gaps by identification of critical knowledge sources needed from outside the project and also ensures that the WBS captures access to and growth of knowledge.

The tool also makes an effective contribution to organizational knowledge base development by the identification of knowledge elements that impact on the key customer needs and ensuring the sharing, transfer, and capture of high value-added knowledge.

The authors are willing to share the experience that they have gained in applying this tool at Defencetek. If you should be interested in using the tool and would like an example spreadsheet please send a request to mlbarry@csir.co.za.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

Proceedings of the Project Management Institute Annual Seminars & Symposium
October 3–10, 2002 • San Antonio, Texas, USA

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