Knowledge creation and dissemination (organizational learning) in project-based organizations
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Peter W.G. Morris and Irene C. A. Loch
University College London
The arena of projects has attracted the interest of scholars increasingly in recent years. One stream is projects as ad-hoc structural forms (Mintzberg, 1979; Mintzberg & McHugh, 1985; Toffler, 1974)—latterly cast as “the hypertext organization” (Nonaka & Takeuchi, 1995, Nonaka, Toyoma, & Konno, 2000; Nonaka, Byosiere, & Toyoma, 2001)—a form allowing organizations to address the structural and behavioral constraints of both bureaucratic and taskforce structures, thereby providing an organizational form that fosters knowledge creation.
Project management is increasingly popular at the practitioner level though the practice, or discipline, is seen by many academics as an outgrowth of production management (scheduling). A broader interest in project-based management has, however, recently emerged (Lundin & Hartmann, 2000; Lundin & Midler, 1999), for projects are important organizational forms—contributing significantly to GDP and society as a whole. These organizational forms are recognized as important vehicles of innovation (Thomke, 2003; Wheelwright & Clark, 1992), organizational change (Kotter, 2002), and knowledge creation and learning (Nonaka & Takeuchi, 1995; Nonaka et al., 2000; Nonaka et al., 2001). The term “management of projects” has been used to capture this broader intellectual framework of defining and delivering the project within its changing context (Morris & Hough, 1987; Morris, 1999). Morris (2001) argues that essentially all projects (and programs) are characterized by a shared, consistent development process, and that our challenge is to understand how to develop and deliver them more effectively, not merely to deliver projects “on time, in budget, to scope.”
Too few in general management give adequate recognition to the strong process basis to projects and the strengths and opportunities this brings, inter-alia, to project-based organizational learning (Morris, 2002). Because projects are major means of creating change and realizing capital investment it is obviously important that we learn and improve project performance. Yet only recently have scholars—and practitioners—begun to stress the importance of learning how to manage projects more effectively through project-based learning.
The research reported here pushes the argument one stage further. Simply collecting lessons learned and putting these into some kind of database for future reference is not enough. To really improve performance we need actively to be creating new knowledge in project-based learning; and to do this effectively we need to understand more fully the difficulty of doing this. To improve performance, to change behavior, and create new ways of thinking requires changes in the way we perceive and act on paradigm changes and new mental models.
This paper discusses knowledge creation and dissemination as the bases of real organizational learning in project-based organizations andour understanding of the processes and practices, challenges, and opportunities.
Knowledge Creation and Organizational Learning
Knowledge creation and learning are increasingly recognized as being of paramount importance by companies operating in the new knowledge economy (Davenport & Prusak, 1997). They are considered a source of competitive advantage allowing companies to differentiate against those able to compete on other dimensions, such as low cost labor (Marshall, Prusak, & Shpilberg, 1997).
While the literature on organizational learning is extensive, the vital issue of knowledge creation had received less attention. Initially, most organizational learning theories were deficient in viewing “that knowledge development constitutes learning” (Senge, 1990). Nonaka and Takeuchi (1995) have outlined the limitations of this perspective commenting that even after many years of work in this field, “a comprehensive view of what constitutes ‘organizational’ learning has not been developed.” Our knowledge has moved on since this was written—but not much. The field is still short of empirical data, debate, and even controversy.
While organizational learning can be approached from several different theoretical viewpoints (Easterby-Smith, 1997), a distinction can be made in the way it is implemented. Incrementalists, such as Levinthal and March (1993), can be distinguished from those looking for more radical change and learning, such as Argyris and Schon (1978) with their double-loop learning.
Antal, Child, Dierkes, and Nonaka (2001) believe scholars diverge most in the way they understand the process of learning. They identify three models. “The early ones were based on feedback loops between the organization and its environment, whereas others portrayed learning in terms of steps or phases—usually starting at knowledge acquisition and continuing through diffusion and sense-making to action and storage.” “More recently a spiral model has emerged as a way of capturing the dynamic process of knowledge creation” (Nonaka & Takeuchi, 1995). Nonaka and Takeuchi's model is arguably the most extended of those currently available, though it is not without its critics. It is the model investigated within a project learning context by this research, and so its criticisms need addressing.
The practice of systematically collecting “learnings” from projects is, surprisingly, relatively new. “Post mortems” or “lessons learned reviews” are now frequently cited as good practice (Collison & Parcell, 2001), and indeed several companies are now encouraging mid-project reviews (peer reviews, gate reviews, etc.). Systematic and scholarly study of project-based organizational learning is even newer.
A review of the literature at the start of the research project suggested that most work at that time had been concentrating on the processes and practices for collecting “information” (Box 1). Later publications reflected a greater acknowledgment of the importance of context (something we shall see strongly reflected in the findings of this study).
Box 1: Initial work on learning in project-based organizations recommended a number of process “good practices.” For example: “project performance should be improved through…
- The systematic collection of learning on projects (Dixon, 2000);
- Periodic project reviews by peer teams (peer reviews and peer assists) (Collison & Parcell, 2001);
- Distinguishing between tacit and explicit knowledge (Morris, 2002);
- Identification of key persons as repositories of tacit knowledge and as “owners” of subject-matter areas (Ayas & Zeniuk, 2001);
- The use of information management tools to aid in the capture, storing, processing, archiving, looking up, retrieving, and presenting of information (Morris, 2003; Currie et al., 2003);
- A discipline of accessing knowledge—using check-lists or other “look-up” guides by the project teams before beginning a new project task (Brander-Löf, Hilger, & André, 2000);
- Having a definition in some way of the knowledge in a particular area: the “Body of Knowledge” (Morris, 2001; Wenger, 1998);
- Having a knowledge management program in place (Turner, Keegan, & Crawford, 2000);
- Distinguishing between individual, team, and organizational learning (Popper & Lipshitz, 2001);
- A program or programs for using the knowledge/ learnings identified (Cross & Baird, 2000; Schindler & Eppler, 2003);
- Applying metrics for the usage made of the knowledge and learning;
- Implementing a competency development program for updating the knowledge.”
Though project management has a strong process basis to it, there are always substantive decisions to be made and in such cases context and judgment is important, and experience and tacit knowledge particularly valuable (Morris, 2004; Bresnen, Edelman, Newell, Scarbrough, & Swan, 2003; Fernie, Green Weller, & Newcombe, 2003; Koskinen, Pihlanto, & Vanharanta, 2003). In fact, even at the process level, context is unavoidable.
Scarbrough, Brensnen, Edelman, Swan, Laurent, and Newell (2002) demonstrate that “many features of project-based practices and learning pose specific challenges to current knowledge management and project management approaches.” Rehearsing the lack of “institutionalized mechanisms for knowledge capture, learning, and improvement, which are built into more steady-state activities” they comment how the multidisciplinary and cross-functional character of projects prevent knowledge sharing, both across and within projects (Knights & Willmott, 1997; Newell, Edelman, Brensen, Scarbrough, & Swan, 2001). Organizational and behavioral constraints are crucial in projects while knowledge management tools are often not used effectively and lessons are not learned. “These features of project based learning pose a major challenge to current knowledge management and project management approaches.” A different view, one in which “knowledge transfer does not occur independently of or in sequence to knowledge generation, but instead the process of knowledge generation and its transfer across projects are inexorably intertwined” is proposed.
Boisot (1998) has elaborated an idea where learning takes the form of a curve and the learning process is affected by the degree to which the knowledge is codified or uncodified, abstract or concrete, or diffused or undiffused.
The Early Grounded Research and the Development of the Integrated Conceptual Model
The research was divided into three stages—only the first two are being reported here. The initial stage concentrated on literature review and grounded theory research with the partner organizations. Grounded theory was used to establish key variables/factors across the organizations to identify the key variables that would provide the foci for stage two. In parallel with the literature review this enabled the research team to develop a conceptual model of the primary issues in affecting project-based learning.
This phase of the research suggested that a conceptual model that sought to integrate the knowledge creation theories of Nonaka (Nonaka & Takeuchi, 1995, Nonaka, Toyoma, & Konno, 2000, and Nonaka, Byosiere, & Toyoma, 2001) with the ‘sense-making’ approach of Weick (1995) would allow exploration of the issue that seemed to be emerging both from the literature (e.g., von Krogh, Ichijo, & Nonaka, 2000; Coutu, 2002) and from the fieldwork—“why is it so hard for individuals to accept or integrate new knowledge?” “Why is it so hard to learn?”
Several elements emerged that suggested important dimensions of how organizational learning happens at the project level and relates to learning at the enterprise level—and vice versa (Lampel, Morris, Jha, & Loch, 2003).
1. The Environment: Project Orientation Interface
Project orientation, defined by the orientation of the enterprise's core operations and leadership, was posited as strongly influencing how the organization supports and controls the projects it performs (Lampel & Jha, 2004).
2. The Learning/ Sense-Making Relationship
How experiences are made sense of in order to learn from projects and the events that impact on them is critical. Sense-making is the relationship between strategic experiences and strategic frameworks (Kuwada, 1998) or in other words the interpretation of experiences to guide the strategic intent.
Generally in the literature, organizational learning has been addressed either as explicitly “decomposed” experiences or as narratives that shape organizational perception (Snyder & Cummings, 1998; Schulz, 2001). We saw such frameworks acting jointly to create a continuum connecting the strategic level to the more micro-level mechanisms of knowledge creation, as in the Nonaka's SECI spiral.
The continuum between decomposition and distillation of project experiences suggested that there might be skews in the knowledge creation spiral that SECI works through. This became important in stage two of the research.
3. The Knowledge Creation Process Within the Interface Environment
The third element of the conceptual model is derived from the SECI model (Nonaka & Takeuchi, 1995; Nonaka et al., 2000, Nonaka et al., 2001). As we have seen, this relates to tacit and explicit components of the knowledge creation process. The work of Nonaka et al. has recently proved influential in project-based learning research (Snider & Nissen, 2003; LeRoy, 2002), which is explored it in the context of the project life cycle.
Nonaka et al. (2001) suggest various forms of knowledge assets linking organizational learning/ knowledge creation to the improvement of business performance.
- Experiential—Defined as “the shared tacit knowledge that is built through hands-on experiences shared between organizational members and between organizational members and customers, suppliers.” The experiential knowledge assets built through socialization are articulated through externalization into conceptual knowledge assets.
- Conceptual—Explicit knowledge articulated as concepts through images, symbols, and language.
- Systemic—Knowledge made explicit as documents or data through a process of combination and are therefore transferable.
- Routine—Practical knowledge shared as sense-making backgrounds and “narratives” of the company.
Nonaka et al. contend that cataloging and offering these knowledge assets alone is not enough: there is a need to understand their dynamic nature. New knowledge assets can be created from existing ones.
The extent to which strategic intent, whether “emergent” or “deliberate,” has been proposed by Zack (1999, 2003) as providing an important dimension to understanding how knowledge and learning mechanisms are employed, which also emerged in the stage one work. We shall see it usefully deployed in interpreting the stage two findings.
Importantly, research by scholars at the enterprise level has suggested that overall business performance is improved when knowledge creation activities in all four of quadrants of the SECI spiral are in balance (Kluge, Stein, & Licht, 2001). Specifically, Kluge, Stein, and Licht proposed that a strong correlation exists between a company's knowledge index and its ratio of intangible assets over market capitalization, thus supporting their original hypothesis that “successful knowledge management is a powerful lever to increase a company's success.” The authors’ hypothesized model suggested this might not be the case in project-orientated organizations.
From stage one a number of propositions were developed that formed the basis of the stage two research.
The core proposition was drawn from the literature (Nonaka & Takeuchi, 1995, p. 66, 105, 109, 122, 225, 231-232, 237), which is:
- The “externalization” element of knowledge evolution has an attenuating (weakening) impact on the learning and knowledge process.
Nonaka et al. considered “externalization” to be both the key to real learning and simultaneously the most difficult of the four knowledge conversion modes.
Exhibit 1. The Complete Project-Based Strategic Learning Engine
Stage Two Research Methodology
In stage two a quantitative survey methodology was used based on questionnaires derived from, and informing, the conceptual model. This questionnaire was based on work of Kluge, Stein, and Licht (2001). The aim was to identify the modes of knowledge conversion profiles for each of the organizations studied, and to identify the presence of knowledge conversion modes, though not necessarily the effectiveness of the knowledge conversion. The questionnaires were designed using the Likert scale to allow variations in responses, rather than only positive or negative ones.
The data was collected mainly through administering the questionnaire in interactive sessions to groups of respondents selected from the “project” population of each organization. There were also extensive numbers of workshops and other meetings at which the research team was able to build up a profile of the culture, work issues, use of knowledge assets, and other things relevant to the process of knowledge creation and project-based learning.
The total number of respondents taking part in the survey was 62 dispersed over eight organizations. This, coupled with the associated meetings, allowed respondents to clarify the meaning of questions, thus enhancing the reliability of the responses. It also enabled the researchers to provide an overview of the purposes of the project at the end of the session, which frequently provoked discussion and provided useful insights. These meetings, together with many others held with the organizations over the course of the research, helped the research team build a rich qualitative understanding of the organizations being studied. This proved particularly important in critiquing the findings and setting them in their context.
The profile of the “modes of knowledge conversion” can be analyzed both by the characteristics of the individual companies and for project management as a whole.
The summary in Exhibit 2 shows the mode bias; quantitative data is given in Exhibit 3. The terms used in Exhibit 2 indicate in the case of a plus sign, agreement of a positive presence of this mode of knowledge conversion. A minus sign is indicative of agreement on a positive absence of this mode. The term “neither” indicates that there was no agreement as to whether there was a presence or absence of this mode.
Exhibit 2. Organization Specific and Aggregated Findings from Stage Two
These aggregated results demonstrate that there is a bias in projects toward “Socialization,” a strong bias against the “Externalization,” a lesser bias against “Combination,” and a smaller bias against “Internalization.” We need to be cautious however as the asterisks highlight the figures where category 3 exceeded (1,2) and (4,5) thus being the larger mode. Insofar as there is the largest bias against externalization we can say therefore that the externalization dimension is more rather than less likely to be an attenuating influence on project-based learning. But so too, this research suggests, may “combination,” and in addition the “internalization” mode has a weakening effect.
Exhibit 3. Aggregated Results for Stage 2
1,2 = [strongly] disagreed; 4,5 = [strongly] agreed
Individual Company Analyses
The findings can be analyzed in detail on an organization-by-organization basis to see how the profiles of knowledge conversion fit within the literature and grounded data derived framework suggested by the stage one research.
Organization 1, a global construction company, is very project orientated. The company had recently been acquired by another global construction company. With the new owner came a significant change in attitudes and perceptions and this carried across into knowledge management: there was strong emphasis on the view that “right behavior is the key to improvement in knowledge sharing.” There was a belief that technology-based solutions were often expensive and ineffective, at least in this environment, and that only a process-driven solution (interactive—not highly IT-enabled) was going to tap the global knowledge within the company that it needed for competitive advantage. (Compare the findings of Scarborough, op.cit.)
A system was therefore put in place that focused on putting people in touch with relevant experts within the company. The knowledge being transferred was largely transaction based—technical, commercial, etc.— rather than learning about how to better manage projects. An important feature was that a knowledge manager was made responsible in each region for ensuring that all requests for information were followed-up successfully. There was close monitoring of the functionality and utility of this mechanism, which is driven from the top with active support and utilizing the experience base of the senior management, particularly in identifying resource persons. A bonus system was built around the system in terms of its use, providing resource to it, seeking knowledge, sharing knowledge, and providing feedback. The effectiveness of inputs provided was also monitored and refined by a constant cycle of feedback. This “behavior” emphasis was seen as underpinning the IT solution. Research by the company suggested that the failure of Intranet solutions tried earlier was that “right behaviors” were not in place.
This system was in principle very oriented toward tacit knowledge, at least in the initial stages of enquiry (“socialization”). Indeed, with the system working so well, there was a real question within the company of the need for codification of tacit knowledge into explicit knowledge. This is reflected in the research findings that indicate that the practice of encouraging face-to-face conversations and of using incentives encouraged a prevalence to tacit knowledge exchange.
At the project level there was little effort, if any, to externalize specific project learnings into best practices. There was no real attempt to capture lessons in project management and to articulate these at the enterprise level. There was little or no sense-making about how to manage projects better. In fact, the company was skeptical of the value of doing this (giving the example of how a repeat project team working for the same client, with the same will to excel, found it impossible to recreate the winning best practice performance they had experienced on the previous project).
Overall, we see a project-oriented organization with a strong project management culture but which appears skeptical about the value of explicitly capturing project management best practices. The project-based knowledge and learning system is primarily used on a transaction basis with project management learnings generally remaining in projects, and in largely tacit form. They are not migrated to the enterprise level, nor carried forward to other projects.
Organization 2 is the Facilities division of a global pharmaceuticals company, which, like the previous organizations, had recently gone through profound structural change—in this case, the merger of two already leading global companies.
At the time of the research the company was in the process of addressing the lack of uniformity in its capital construction project management processes. (Unlike the contractors—Organizations 1 and 4—this company, with its more consistent set of project processes and business drivers, believed more strongly in the value of capturing, articulating, and disseminating learnings on best project management practice.) A new set of project management guidelines, practices, and tools had been developed and were being rolled-out worldwide. These guidelines were developed using both internal and external sources to encapsulate the company's view of world-class project management, providing one set of knowledge guidance appropriate for the merged organization. Clearly the learning that they represented was in explicit format (systemic knowledge assets) but the rollout was adopting a learning and adoption approach that recognized the importance of tacit knowledge and the role that people necessarily play in imparting such project management knowledge. (And in fact the whole range of knowledge asset types—systemic, experiential, conceptual, routine—were present.)
The respondents supplying the research data had recently worked together to create the new standards and rollout program. In the course of designing and developing this system the use of all the “modes of knowledge conversion” emerged as an important strategy for disseminating the project management knowledge and for inculcating learning. The disconnect hypothesized in the stage one conceptual model (Exhibit 1) between learning at the project level and at the strategic level had been noted by the core team members (not least through their participation in this research). The research consequently shows all modes of knowledge conversion to be present.
Overall we see a strongly project-oriented organization adopting a deliberate balanced knowledge creation process for imparting project management knowledge. There was strong indication of sense-making at the project and project-to-enterprise levels. Early research indications suggested this has had a beneficial impact on project performance though it was too early in the roll-out to observe how effectively learning was being fed from projects back to other projects via enterprise-level knowledge capture.
Organization 3 is a global consulting engineering company. For several years they have been working to develop a knowledge management function that will enable staff to access wisdom in the company, be this explicit information on engineering matters or less tangible information on people or management situations. As a result they have implemented a portal-based approach incorporating both the means of access to corporate databases and project-specific data, and to communities of practice and subject-matter experts. They believe there is a need to link the ‘supplier’ (of knowledge and experience) and the ‘customer’ more quickly, more efficiently and with fewer numbers of interfaces. As a result their knowledge management is based upon a concept analogous to a ‘dating agency’ or ‘marriage broker’: they can effect the introductions but can't guarantee the results!
This strategy would appear prima facie to the likelihood of a balanced approach to knowledge conversion. In fact there is a strong bias towards ‘socialisation’ and, interestingly – perhaps due to the portal – towards externalisation, with a bias against ‘internalisation’.
Organization 4 is a global IT services provider. Like Organization 1 it is very projects orientated—both are essentially service providers (contractors). As with the first two organizations, it had recently experienced important governance changes as it became more fully integrated into its foreign owner's corporate ownership, structure, and culture. There was a view that over the last few years many valuable informal ways of working and “people-interfaces” had been lost, making organizational change the biggest inhibitor for organizational learning.
Knowledge management had in fact been a very important element of this culture, though the emphasis was primarily on the support needed for projects’ sales, development, and delivery activities, and doing this very much through technology. In other words, like Organization 1 the knowledge support was very transaction orientated. There support system is strongly process based, built around a gate going from prospect to contract award and continuing into contract delivery.
The use of past lessons in managing projects was an issue. A lessons-learned database had been set up but was not searchable in an intelligent way (e.g., by keywords). Furthermore, it was not maintained up to date, and had in fact rather fallen into lack of use. In short, there was poor transfer of project-based learnings on how to manage better. This was particularly notable in that the company had recently suffered some severe project management difficulties, the lessons from which were not being learnt by the organization.
The findings show no clear indication of socialization. There is however evidence of externalization—apart from Organization 2, uniquely among the eight companies studied—though worryingly negative indications for combination and internalization. This pattern could reflect the externalization of lessons learned in the database but the absence of people taking any notice of these lessons. Crucially, the company is then poor at combining to create new knowledge about its project performance and internalizing this.
Overall, we see a strongly project-oriented organization that has a strong knowledge management culture, but which, as in Organization 1—a similar service provider albeit in construction rather than IT—was poor at transferring management lessons from one project to another andis reasonable in abstracting lessons from projects and at sense-making at the enterprise level but poor at transferring these on to other projects.
Organization 5 is the project services function within a large international bank. It is strongly projects orientated. There was a quoted categorical reference to “projects being successful when they are owned in house and not run by externals.” (Interestingly, however, this changed just at the end of the research, largely driven by the arrival of a new chief executive.) The ownership and responsibility of projects was in fact quite distributed with many projects covering several areas of the business.
There had recently been of a spate of projects being cancelled, indicating a need for improvement in project management. As a result more attention had been given to improving project management standards. This was being addressed by a program of professionalism and basic training, supported by a series of centrally offered learning (systemic) assets (e.g.,, a “Quick reference guide to Projects.”) There was a mandated project development cycle and a number of standard tools and templates. The knowledge revision and feedback process was rather ad hoc. An assessment of recent past performance suggested a need to have more in-depth reviews (mobilizing expert, tacit knowledge). There was a review library; however, there were no processes to filter reviews for lessons learned though it was recognized that these needed to be put in place. What was missing however were the “human bits” that go around the processes (i.e., the issues related to the culture, how to encourage people, how to get users to engage, etc.).
Given its history and the overwhelming IT nature of the working environment, and despite the recent efforts to recognize the importance of human support, there was an obvious and in fact deliberate strategy to create virtual working. The research data reflects this. There is no evidence of sharing knowledge via socialization, nor of turning tacit knowledge into explicit (externalization). Instead, however, there is evidence of combination and some evidence of internalization.
The presence of knowledge conversion mechanisms in the combination mode while there are none in the externalization mode is explainable as the working practices of calling on preassembled systemic knowledge assets, coupled with the practice of analyzing and writing reports, create an environment where knowledge needs to be combined from different sources. (The other IT organizations, 4 and 6, also had challenges in externalization.) The absence of generating fresh learning from projects via socialization and externalization is key. Sense-making happened primarily as a “pull” at the enterprise level. There was little observable sense-making at the project level, “pushing” lessons-learned to the enterprise level.
Organization 6 is the information arm of a global and highly successful energy company. It is strongly project orientated. The company as a whole has invested significant amounts of time and resource into knowledge management and learning, not least at the project level. It views knowledge management as a complex arena spanning boundaries such as learning and development, information technology, and human resources. It takes a holistic perspective, according equal importance to people, processes, and technology, which addresses discovering, capturing, adapting, adopting, distilling, validating, sharing, and applying knowledge. Networks and communities of practice are the primary route used to achieve this. (Very similar to Organization 1—using IT to put enquirers in touch with potential knowledge providers—and indeed to the consciously balanced approach adopted by Organization 2.)
Using a three-stage model that relates learning processes and the capture and transfer of knowledge to day-to-day business at each stage of the cycle, learning, and the reuse of knowledge are proposed as happening in different ways at different points in the cycle. The final stage is to embed this captured knowledge into business processes. To do this knowledge needs to pass through a life cycle a number of times. “Culture” in the model is important in that capturing know-how is not sufficient on its own: you need to nurture the right behaviors and foster a supportive company culture. For them, the transfer of knowledge is pre-eminently about people and relationships.
Considerable weight is put on performance data that is benchmarked between the company and other process engineering companies. On the construction side this data shows clearly that “best-in-class” companies put most emphasis on “Front End Loading” and “Value Improvement Practices,” yet the company finds it particularly difficult to drive this learning home in a way that creates change and results in performance improvement. The IT arm finds similar difficulty in getting people to pay attention to such best practices.
The research data clearly reflects this learning culture, and the difficulties the organization still faces in generating real learning. There is a strong orientation toward socialization: people prefer to talk rather than externalize learning. There is no evidence of externalization and measurable absence of combination and internalization mechanisms. The decentralized, nonprescriptive and informal is preferred over the mandated and explicit. (Although toward the end of the study this emphasis was seen to be changing.)
The company is widely seen as being focused on people and using narratives as a means of communicating across the organization. This emphasis trickles down to the project level, even within the context of a truly global, and significantly IT-enabled, quasi-virtual, project management community. Learning is largely confined to the socialization level: real learning, as posited by the movement through the Nonaka spiral, appears to be absent. Sense-making happens at the enterprise level but not at the project level and enterprise-based project learning is not constantly refreshed from the projects.
Organization 7 is a global aerospace company. It sees itself as a Tier 2 supplier but very strong in product development and R&D. The company culture is widely perceived as being engineering orientated: it is indeed one of the country's foremost engineering enterprises. Engendering a project and program management culture alongside this engineering culture has been, and continues to be, a major effort even though the company is highly project orientated: all its activities are supposed to be run as programs. In principle the company believes strongly that project management knowledge is central to its business effectiveness.
At the time of the research the knowledge management strategy was fairly embryonic in the sense that it was not widely accepted across the organization. Incentive systems to support learning activities did not exist in an explicit sense. As with Organization 5, there was considerable reliance on “systemic knowledge assets” but this had been paralleled by a real weakness on the people side of learning. Structures such as a “lessons learned log” existed in principle but were not well embedded—there was no routine review of lessons learned at the end of projects, and the feedback process was relatively ad hoc.
Nevertheless, knowledge acquisition and knowledge documentation processes had improved. There had been recent moves to identify “good” practice through “peer assist” and a balance was being sought between document-based and people-based routines. The company's perception was that at the time of the study the people-based routines were the strongest. Despite this, the data showed an absence of knowledge creation mechanisms in the socialization and externalization modes and only a slightly less marked absence in the combination mode. And there was no indication of internalization. The profile is similar to Organization 8 were there was also evidence of this phenomenon, though at least in Organization 8 there was the excuse of major organizational upheaval. Here the marked absence of knowledge conversion was present in an organization that was strategically stable—indeed, successful—and where there had been marked efforts to inculcate a best-practice projects and program management culture.
Overall, sense-making was weak at both the project and enterprise level. Guidance was tapped from external sources rather than being captured, refreshed, and used from the company's real project experience.
Organization 8 is a government department. The organization is geographically highly decentralized. At the time of the research it was moving from a project to a portfolio orientation. Considerable effort had been put into learning and knowledge management, but increasingly this was around policy issues rather than implementation issues. The organizational learning culture was highly dependent on individuals producing explicit learning material (brochures, pamphlets, booklets) that were then available for distribution. That is, there was considerable emphasis on producing “systemic knowledge assets” in the Nonaka research sense. Learning processes like mentoring, use of specialists, and knowledge sharing at workshops on the other hand were not institutionalized.
Emphasis on lesson learning was said to have strongly increased over the last five years. However, professional satisfaction was the driver for learning and was not explicit in a reward system. Unlike in Organization 1, tacit knowledge was not actively managed. Discussions “happened” in-groups but they remained limited to that group. With the recent initiation of a formal knowledge management program use of explicit knowledge management tools such as the intranet and other tools had been improving.
The research results reflect the change from a project to portfolio orientation and the preferred modes of knowledge creation. Socialization was poor (which is not a surprise); worryingly, there was no evidence of effective internalization—the pamphlets and books, etc., appear to be poor means of stimulating real learning. There was no evidence of people actually seeking to externalize their project-related learnings or of combining these to create new insights.
The reduced project orientation together with the absence of knowledge creation at the SECI level suggests that project to enterprise learning—of all kinds—was very weak. There was sense-making at the enterprise level, but this did not transfer down well to the project level.
The Aggregated Findings from the Organizations: Lessons for Project-Based Learning
At the aggregated level for projects as a whole, we see:
- A bias toward socialization as the preferred knowledge mode;
- A bias against externalization and combination, and a slightly lesser bias against internalization.
Intuitively this suggests a bias toward learning and sense-making by narratives and a bias away from decomposition into explicit knowledge. This certainly accords with many people's experience of the project management world, and is confirmed by the qualitative analyses of the case studies—all bar Organization 7 show this pattern. It seems fair to suggest it is typical therefore of projects and their management.
Formally therefore the data supports the hypothesis that the lack of externalization (and combination and internalization) is attenuating knowledge conversion.
Quite deliberate deployment of knowledge creation mechanisms are observable in some companies—Organizations 1, 2, 3, and 6 for example—though most experience difficulties and frustration in achieving the pattern of knowledge creation they seek: Organization 5 and 7 were unable to get the degree of socialization they wanted; Organization 4 was unable to change the focus of its knowledge creation from transaction support to real learning about projects; and Organization 6 had difficulty getting people to focus.
Interestingly, all the construction organizations show a strong bias toward socialization, with more mixed results in the IT companies, and a definite bias against in the manufacturing and government organizations. (All of which can be explained in terms of culture and management intent, as described above.) The same holds generally for “combination.”
Of the three IT-based organizations, two were weak in socialization. The third, Organization 6—part of a global energy company having a strong socialization culture—was strongly socialization oriented however. In other words, IT does not necessarily have to imply less socialization: culture would seem to be more important.
The “intended” Knowledge Management / Organizational Learning strategy is quite different in the three construction organizations. Organization 2—an owner—had a very deliberate strategy of wishing to roll out corporate project management best practice worldwide, and quite consciously used knowledge conversion enablers from all the Nonaka et al. quadrants. Organization 1—a supplier—were skeptical of the value of this and focused instead on transaction knowledge (knowledge needed to perform the project better), using socialization as the preferred means of putting people in touch with relevant sources of knowledge.
Organization 4, another supplier, was also transaction focused but had begun to realize that it needed to be better at learning from past projects’ management experiences. Its difficulty in doing this stemmed primarily from lack of management attention.
(It is interesting to note in passing that the owner organizations were more inclined to believe both that “good practice” could be documented explicitly and lessons learned captured from projects than were the suppliers in the study. While this is by no means true of all suppliers, there is resonance with the notion that owners have a tighter linkage between their business processes and project processes than is often the case with suppliers.)
Difficulties in implementing a “balanced” knowledge conversion program arose partly in culture (Organization 7: the dominance of the engineering “silos” and the difficulty of getting socialization), culture and technology (Organization 5: a non-socialization behavior oriented toward working at the workstation rather than communicating with people), getting people to make time (Organization 6), and management inattention (Organization 4)—in fact these factors are observable in most of the organizations. In general culture and strategic intent are very evident influences (history, type of work, leadership, educational formation)—this fits well with the literature.
The study shows that most of the companies experienced difficulty in getting knowledge and learning from the project level back to the company level, and then back out to other projects. We saw “systemic knowledge assets” being used by many companies as a core means of passing on knowledge to new projects (Organizations 2, 3, 5, 6, 8, and possibly 1 and 7). But this is a different thing to externalizing knowledge in the more cognitive manner proposed by the double-loop and spiral theorists; in fact, of these companies, only three show a bias toward externalization.
Further, in some companies (Organizations 1, 2, 6) we saw abstraction and sense-making at the enterprise level of project learnings but difficulty in getting this learning transferred to other projects—often because of the difficulty of getting people to care (Organizations 2 and 6), and/or a skepticism that such learning will actually lead to improved performance (Organizations 1 and 6).
We saw little evidence of relationship between performance and learning (or learning mode). The balance in knowledge conversion modes proposed by Kluge, Stein, and Licht (2001) was not evident at the project level except in one company (and there is no data to suggest that this then led to any improvement or otherwise in performance), nor was there any evidence in the stage three studies (not reported here). In any event, there are major methodological difficulties in showing a correlation between project performance and company performance, let alone learning/ knowledge conversion, project management, project performance and company performance: there are too many independent variables.
The overall research objective—“the development of a theoretically grounded ‘best practice’ model of project-based organizational learning and knowledge creation”—was, we believe, largely, if still partially, met. Clearly “best practices” can be adumbrated (see Box 1) but these are unlikely to lead to the generation of new knowledge in the organization (e.g., regarding how to manage its projects better). For this, some form of cognitive learning of a double loop or spiral nature is probably required.
The research suggests the conceptual model developed in phase 1 is cogent but did not furnish the empirical data to validate it.
The research shows that it is genuinely difficult to transfer learning from projects to the enterprise, let alone to then transfer this back to other projects. The instances where this was done best was where there was active involvement of project staff (socialization); where it was worse was where the primary emphasis was on systemic knowledge assets being the primary source of knowledge guidance. Relying on projects to draw on explicit knowledge in this way failed to refresh and maintain the knowledge base—learning was stale and ineffective.
The research shows specifically that, for projects:
- Socialization would appear to be the preferred mode of knowledge conversion—this would be consistent with recent project-based research emphasizing the importance of tacit knowledge (e.g., Koskinen, Pihlanto, & Vanharanta, 2003);
- Externalization and combination are markedly less evident (with internalization also less evident): this may be inferred therefore to have a negative impact on learning (attenuation).
Projects, therefore, may not benefit from the balanced mode of knowledge conversion implied by Kluge, Stein, and Licht (2001): this finding would fit with many practitioners’ experience and with the above findings. The temporary nature of project teams and the tendency toward learning by narrative (as well as by doing) both stress the importance of socialization. This is not necessarily to say there might not be benefit in a balanced set of knowledge conversion modes for optimum performance, but certainly socialization would seem to be the bedrock.
There is qualitative evidence from the study of the importance on the effectiveness of organizational learning of:
- Organizational culture (but not of technology);
- Management intention (deliberate versus emergent, or rather perhaps, unguided).
In summary, the research suggests that knowledge creation is weak in projects and suggests why.
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