In this essay on knowledge management I would discuss innovation as an important aspect in the study of knowledge management and its role in IT business organizations. The course of the essay begins with the introduction and development to innovation and critical analysis of its importance in knowledge management in general, in IT business, and personally to me. Further, I would discuss how I intend to apply this in my future expeditions involving professional career as an IT manager as well as in personal.
With the advent of hyper competition (D'Aveni, 1994 cited in Johannessen et al., 1999; Smith et al., 2008), knowledge management has emerged as a new discipline of study and a key element in any organization's performance and competitiveness. Hyper competition as stated by Gopalakrishnan and Bierly (2001) is a situation of turbulence when the technology advancements are characterized by faster rate of transformation leading to distorted enterprise boundaries. Later, Carneiro (2000) emphasized on creativity and innovation as a utility of knowledge management which is vital in gaining competitive advantage for any nature of organization.
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Now how can we exemplify this term 'innovation'? This term is derived from Latin word 'novus' which means 'new' as in a new idea, method, device or process Gopalakrishnan and Damanpourb (1994). In the late nineties and early twenties, Johannessen et al. (1999), Carneiro (2000) and Luecke and Katz (2003), established the term Innovation as a management process of knowledge application in one form to generate a new form of knowledge, products, services, or processes but with greater perceived value that should be utilized to bring some tangible difference in domain of its application. Abou-zeid and Chang (2004) further consorted innovation with enhanced organizational competitiveness by associating innovation to knowledge evolution which is responsible for positive transformation of business productivity in turn to increased economic value and gain competitive lead in marketplace. In other words, innovation can also be described as knowledge which could be utilized to bring a social or commercial reformation (Wikipedia, 2010)
Innovation as an aspect of managing knowledge of organization's employees has become one of the core facilitators of economic and technical growth and definitely reserved a position with promise for an improved competitive place in business environment (Johannessen et al, 1999). Further, knowledge management involves the need to make essential changes in original processes in order to generate new combinations or inventions of learning and understanding. Innovation is termed to be successful business function only after the idea generated by the knowledge management has been implemented to be placed in wide spread usage (Tidd et al., 2001).
Knowledge management also facilitates the collaboration among the different types of innovative assets in organization which reflects the need to emphasis the variety of available knowledge and associations among them (Johannessen et al, 1999).A very good example of this is Google Inc who has already established a second position in business for its knowledge intensive innovative ideas and their success (businessweek.com, 2009). Merrill (2007) claimed that recruiters at Google place an extra emphasis on the innovative and creative work of the prospective employee simultaneously with hiring people from variety of background to increase the innovative capability of organization.
Why This Topic Is Important.(500)
Importance of innovation as an aspect of knowledge management topic can be illustrated by referring to huge amount of literature already in place on knowledge management, innovation and innovation management; in fact there are individual journals available for these subjects such as International Journal of innovation management and Journal of knowledge management.
Johannessen (1999), Carneiro (2000) and Smith et al. (2008) demonstrates that managing the knowledge in order to facilitate innovation has generated consciousness and claims innovation to be motivation for persistent competitive benefits and growth, irrespective of the nature of firm. Smith et al. (2008) argues that to attain growth we need to administer new knowledge which can either be acquired by exterior explicit agents or generated and invented internally by creative members of the organization. When properly managed and implemented, the internally generated knowledge would be of greater competitive advantage as it would be hard to imitate by competitor (Gopalakrishnan and Bierly, 2001).
Carneiro (2000) argues that knowledge management leads to the purpose of innovation and competitiveness whenever there are transformations in the 'external environment and internal situations'. In this sense it involves both incremental as well as radical innovation, for example, increasing the small functionalities in quality of products or websites is a incremental innovation but introducing a new method of manufacturing or launching a newly inventive product is radical innovation. As Carneiro (2000) suggests, the important aspect of knowledge management for the above processes is improvement of the flow of information in parallel and consistent direction. Moreover, Swan and Scarbrough (2003) states knowledge management as an value enhancing to activities such as knowledge acquirement, foundation, confinement, storage and sharing which facilitates the process of understanding and generation of the innovative processes and products.
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Another instance of importance is shown in the survey by Diamond (2010) which established that Business Innovation was among the top priorities of CIO's and senior management executives. Nonaka, I and Takeuchi, H (1995) study has created the acceptance of both tacit and explicit knowledge as elements of organizational innovation with reference to the Japanese company's concept of identifying distinctive methods for innovation. A very good example is of automatic bread making machine in Japan which involved expertise of both tacit knowledge of people from individual sectors such as master baker, marketing and explicit knowledge of software development, heating methods, rice cooking and mechanics Nonaka, S and Takeuchi, N (1995). However, in today's world where explicit knowledge is widely available, tacit knowledge is the one to play important role in order to gain competitive benefits and advantage. Since last few decades, businesses are using Information technology to reduce the cost and engineering in order to gain profits and competitive advantage. But, today IT has become explicitly available, cost reduction and reengineering are no more effective in reducing costs and profits (Jacobson,1992). So using knowledge management strategies to facilitate creation of innovation and managing this innovation by employees hold become the key factor in generating top-line growth and increasing bottom-line results (Canreio,2000; Davila et al., 2006 Cited in wikipedia, 2010) .
Among the various important concepts of knowledge management that I have learned during this module, I found innovation to be most valuable and important both in my personal as well as professional life. I believe innovation is not just present in the firms for creating profits but can be effectively utilized in our daily jobs in everyday life, may be for saving some time, reducing environmental waste or aesthetics purpose. For example, innovation is also in creating a pen holder from ice cream sticks, building a lamp shade by decorating and colouring old wooden basket. However, for the purpose of this essay I would primarily focus on innovation as a knowledge management approach in business environment setting.
Critical Analysis of the Topic(600-1000)
This section of the essay demonstrates the critical analysis between the benefits and threats of innovation as a knowledge management tool. Extensive discussion in literature on the role of knowledge management and its subsidiaries (such as knowledge sharing, innovation and creativity) as a part to corporate strategy and business benefits in several forms of technical, process or products scenarios have suggested innovation to be affective concept which all the organizations should adopt. Supporting this concept, Carneiro (2000) and Gopalakrishnan and Bierly (2001) suggest that innovations with adequate knowledge management are the most effective means of generating a strong weapon against opponents. However, possible threat to this is security of the knowledge flow, especially out of the boundaries of organization.
Moreover, knowledge management and innovations is not only for scientists, companies and firms. A very good example can be cited from a lecture where a friend of our professor was in habit of managing knowledge by maintaining a diary to keep a track of all his thoughts, learning and ideas. I believe those diaries would be tremendous source of information and knowledge for everyone and could be used to generate new progressive ideas.
A study by Strategic decisions in 2004 identified different views of laying emphasis on knowledge management in order to generate more creative and proficient innovators. They claim that providing individuals and teams with access to ideas and information combined with their experience automatically facilitates building of good ideas and their incorporation in innovative products. In a long tern, this culture guarantees the improved production, quality and yield for the firm.
Another important benefit of innovation can be gained through legal protection and secrecy of the innovation. A survey conducted during 2008 in United States by Ceccagnoli and Rothaermel in showed 30 % increase in organization getting legal security of their technologies and 90% maintain trade secrecy more effectiveness. These concepts also promise the original innovators their share of innovative spirit and economic growth with business process becoming more competent and cost effective for the industry. Ceccagnoli and Rothaermel (2008) illustrated its importance by citing an example of CAT scanner business innovation by EMI Medical which could have established EMI Medical as market leader in CAT scanners but failed due to lack of corresponding resources and was later acquired by GE Medical systems who gained the market advantages and profits by technology imitation.
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Moreover, Gopalakrishnan and Bierly (2001) categorized the innovation into internal sourced and external sourced on the basis of knowledge association of innovation and the firm's boundaries. He suggests that if the organization business model believes in increasing the core competency and attaining higher profits, innovation should be generated and implemented in in-house fashion. But if the company wants to attain profits by implementing innovation at a faster pace without expenses in research and innovation development, external innovation can be used. However, he also claims that higher profits can be attained by internal innovation only.
Threats to innovation(350)
One of the most important threats to innovation is poor understanding of the customer and market requirement. Google CIO Merrill (2007) attributes the innovational success at Google Inc to the better understanding to customer requirements and needs. Lundvall (1988; cited in Reichstein 2004) also contributed lack of interaction between knowledge engineers and customer to be key issues in development of successful innovation. This is because the process of innovation can only be termed as complete after the innovation has been successfully placed into widespread usage (Carneiro, 2000).
Self ignorance of the idea by individual is another important threat to be considered. A very good example to illustrate this threat is from our knowledge management lecture (Dr. Richardson, 2010) on innovation for Coke advertisement creation in which, when fresh graduates were asked to get one innovative idea in half an hour. The result was only a few ideas that got materialized. But later people were asked to get 100 ideas each; the discussion was filled with hundreds of ideas. This is because in the first scenario, graduates evaluated their own ideas and were hesitant and ignorant in choosing and evaluated their ideas in order to discuss one best idea, but in the later case as more ideas came up due to unconstrained flow of ideas.
Chesbrough (2007) states that not much time back, there was a period of inventions and innovations when organizations doomed that innovations required large amount of finances and time for research by hiring the most intelligent people and equipping them with high profile labs and instruments for an innovation to occur. However, in the current environment of hyper competition, companies need to continuously create innovative products and services for sustaining the market leadership and competitive advantage. This is a challenge for innovative companies to create a better integration of knowledge base and business model for enjoying the continuous economic benefits. Good example for this is Dell in Computers Industry who is renowned in industry for innovative efforts in e commerce, supply chain management (Wikipedia, 2010) and introduction of new technologies, products and services with increasingly better quality, features and product range at frequent time intervals.
Another important threat is lack of complementary resources and protecting the innovation from imitation. Ceccagnoli and Rothaermel (2008) argue that efficient creation of technical innovation and knowledge learning environment are not the sole factors to gain commercial success. Most of the innovator who had not realised the significance of returns on their innovation ended up in making temporary market domination only. However, this threat can be addressed by the concept of renting the innovative asset based on coalition, protected by technology or license agreement.
Non availability of appropriate knowledge, skill set and training in the team, can become a concern for innovation even with availability for good knowledge database, processes and management. Moreover, the availability of workers skills and knowledge but lack of supportive higher and middle management, knowledge sharing tools and motivation also proves as a threat to innovation. Reichstein (2004) suggests that the learning capability of employees with better and higher education background is more which leads to better understanding and innovative competence in their work. As innovation is a highly complex process (Gopalakrishnan and Bierly, 2001; Gopalakrishnan and Damanpourb, 1994), deploying extremely skilled workers with motivated and supportive management in coalition with frequent training increases the velocity of innovation.
How I Intend to Apply This Topic.(200-300)
In my professional life I have been a network specialist and after completing this course aim to be an IT Manager in some organization which works in networks like Cisco Systems. The concepts of knowledge management and especially innovation are the core element of this type of organizations. It would be tremendously useful in utilizing my existing technical knowledge with the available resources to create and help my colleagues in generating better innovations and maintaining the competitive lead for the organization.
The concept of considering customer requirement and understanding of the market (Merrill, 2007; Carneiro, 2007) in the knowledge management scenario for facilitating innovation would be very useful in projects that are to be created for various locations and people around the world. For example, products and their usage, processes and acceptable services differ tremendously based on the location of implementation. So before investing in an innovative product I would focus on the customer base and market research of the location for which the product in intended.
Further, if I would get an opportunity to be a member of strategic formation team, my focus would be on constructing a work culture and platform where professionals and management can come together to share and test their knowledge and innovative ideas without the fear or risk of rejection or failures.
In my personal life managing I would utilize my knowledge to create small innovations which would help reducing the waste in household, save me some time. This could be painting the CD's or electronic waste to prepare decorative articles, using egg cartons for storing ear rings and old newspapers for stuffing in shoes when keeping in store to maintain their size.
Conclusion (100-200 words)
Knowledge management in a very wide topic in itself and I understand that devising the competitive advantage requires a perfect combination of innovation, intellectual capital, organizational learning and communities of practice. In this essay due to the given guidelines and constraint of word limit and time I have explained only the importance of innovation as a knowledge management tool. However, in the section for threats, I have included some of the other indispensible Knowledge Management tools because ignoring those elements would severely hamper the potential benefits of innovation and knowledge management.
In addition to threats I have also discusses the benefits and evaluated the available literature for identifying innovation be good or bad for any firm. To support the views, several examples have been cited ranging from EMI as failure and Google Inc as a success in creating beneficial innovations. Further, in the last section I have discussed the approach in which this study would be helpful in my career and life after college.