KM is a natural process used to maintain and improve survival.  Since the first tribe banded together, humans have been governing the production, acquisition, and transmission of knowledge.  The survival and legacy of a tribe depended on how well knowledge was managed.

In primitive days, we used tools such as fire, rocks, and wood to attain our cultural goals.  Today, our tools are computers, books, software, etc.  These tools are known as artifacts.  Therefore, artifacts are the tools we create to help us achieve our cultural goals.

Mentifacts are knowledge artifacts that can be transferred from one group to another.  In a tribal society, for example, the steps in building a fire, once learned, were passed along to future generations.  Sociofacts are rituals, behaviors, and other social traits that can be transmitted from one group to another.  For example, the sociofact about the role and relationship of the members of the tribe to the shaman, elders and chief can be communicated and transferred through generations.

Throughout history, knowledge has been transmitted from generation to generation and from culture to culture through oral and written means: storytelling, teaching, and so on.  In a crisis, a tribe made rapid adjustments to its knowledge base if a portion of its essential knowledge base was destroyed.  For example, if an avalanche buried a group of food gatherers, their knowledge would have to be rapidly transmitted to other members of the tribe or the tribe would not survive.  Storytellers have always recited a culture's oral history, passing on knowledge from generation to generation:  parents transfer knowledge to children; churches enforce a set of beliefs among their members.  It is what individuals and groups do, and have always done: transmit group knowledge to improve survival.

Notable methods and products have been created as a result of KM.  The building of the pyramids of Egypt, the way ancient Greek teachers used the Socratic method to transmit knowledge to their students, and landing on the moon are just a few.

The intentional practice of KM is not a new phenomenon.  Plato designed an Academy and Aristotle a Lyceum to advance their knowledge of philosophy.  They each experimented with varying systems before settling on the one they felt provided the most efficient environment for the creation and sharing of knowledge.  Ptolemy I of Egypt founded a library at Alexandria, making KM decisions on where to place the library, what scrolls to make available, and how to preserve the scrolls in spite of many attempts to destroy them.  University design to promote research and education and Robert Oppenheimer’s organizing of the Manhattan Project both required KM type reflection and decisions.

Every employee within a business is involved in knowledge management.  The procedural knowledge of the organization is diffused to its members through policies, procedures, employee orientation, and training.  Reward and punishment systems are established to ensure that certain organizational rules are followed.  However, the involvement of the employee in the knowledge management process varies from firm to firm and industry to industry, leaving every company with many KM improvement opportunities.

Managers at a manufacturing company worry about their aging workforce, of which a large portion will retire over the next five years.  Unless the firm acts quickly, a significant chunk of organizational experience will leave the company.  Can they implement a program that will extract and transfer the knowledge of these individuals to younger workers before their "experts" retire?

A pharmaceutical company wants to cut the concept-to-market time of new drugs.  Each day saved is worth millions of dollars.  What if scientists were given better knowledge resources?  What if better communication systems were put into place?  Can an environment be created that would result in increased knowledge production for the scientists?

Staff members of a customer support division do not share solutions with each other, resulting in hundreds of wasted hours spent resolving similar problems with little improvement in resolution time for the customer.  What can be done to distribute the knowledge of the problem and solutions to other staff members?

An attorney at a law firm has many years of experience trying cases in front of several judges.  When inexperienced attorneys join the law firm, no process exists for the experienced attorney to transfer his knowledge about strategies that he has used with each judge.  Can they establish a process for transferring experience, thereby improving the firm’s ability to win cases and enhancing its reputation?

The senior managers of an information technology division realize that if they could improve the way software engineers share software coding techniques and reuse software code, they could save both time and money.

These are just a few examples of business activities that need a KM process.  All organizations have similar challenges that affect every activity.  Moreover, while companies have not waited for the KM industry to try to solve these problems, it is nonetheless the KM industry with its standards, tools, and techniques that will make it an easier, more disciplined, and repeatable process.

Here are some examples in Company X of how knowledge can be produced and managed (or mismanaged):

• A director selects team members based on the knowledge and skills of individuals, trying to create a balance of skills for a successful team.
• An employee goes to a conference and overhears a conversation about a product a competitor is developing.  When he returns to his company, he shares this information with his colleagues and his boss.
• A manager provides a budget and space for a divisional library.
• Employees are allowed to retire with only one day's notice.

Acquiring, diffusing, and producing knowledge occurs all the time.  Deciding which knowledge to accept and not accept, deciding to let people retire without transferring knowledge to their replacements, and so on, are KM decisions.  However, such KM is ad hoc; that is, knowledge is created for a one-time purpose or to focus on examining a specific subject.  What is missing is a central KM plan to guide and orchestrate these activities: a plan that takes created knowledge and relates it to a central KM vision or strategy.

Business is interested in KM and its effect on financial results.  The KM process must be tied to the primary performance measures of the business with a clear connection between the resource cost of KM and its benefits to the business.  Here are some examples of how KM programs/projects can affect the bottom line.

• Improve training programs
• Reduce loss knowledge from departing employees
• Improve customer satisfaction in technical help desks
• Give employees access to corporate knowledge to better fulfill their jobs
• Create living online manuals with observations, insights, and lessons learned form the employees
• Support process to help managers make better decisions
• Develop and manage Innovation Labs

The financial impact of these projects can be sizable.

• Reduce training costs
• Reduce consulting costs
• Increase rate of innovation (Knowledge Creation)
• Improve knowledge about the market
• Affect the organization's hiring patterns
• Influence the selection of team members
• Knowledge audits of companies being assessed for possible acquisition

Managing knowledge is like managing honey. Both honey and knowledge are natural resources.  Honey is produced by bees; knowledge is produced by humans.  A direct relationship exists between the environment and the quality of the product, whether it's the condition of the hive or the business environment. In addition, when the condition of the environment is improved, the quality of the product also improves.