MM 5011 Knowledge Management Book Summary Knowledge Management Dalam Konteks Organisasi Pembelajar

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Haidir Afesina

MBA Executive 46

MASTER OF BUSINESS ADMINISTRATION SCHOOL OF BUSINESS AND MANAGEMENT INSTITUT TEKNOLOGI BANDUNG 2012

Key Points
Knowledge management is integrated approaches with systematical steps to manage knowledge in organizations that create values and increase competitive advantage. Establish a conducive learning environment is essential in knowledge management. Knowledge management must address people, process and technology. Knowledge is both tacit and explicit. To change people habit and mindset are the most challenges in building knowledge management process. Jann Hidajat`s individual learning model is learning ability in his environment (outside in) and change or actualize himself (inside-out). Jann Hidajat`s organizational learning models are single loop (integrate intellectual and emotional) and double loop (integrate intellectual, emotional and spiritual through thinking process and soul). Three pillars in learning organization are individual learning, organizational learning, and learning team discipline`s (learning habitat). Learning organization is an organization that able to transform knowledge cyclical and sustainable, from individual learning into organizational learning to generate human capital organization as competitive advantage Learning organization buildings are foundation (trust and learning culture), learning skill, learning facilities (access, reward and recognition), learning discipline and enabler (leadership). Implementation of knowledge management and learning organization is depending on outer shifts (organization, technology and system) and inner shifts (people and environment). The important steps to be taken to build learning organization are start with what the organization need, then create small projects (pilot group), last is maintaining the profound change.

1. New Paradigm of Knowledge Era

Alvin Tovler (1980) defined the three eras of changes; there are manual (physic), industry (machine) and knowledge. The characteristics of knowledge era are; 1. Easy to get (everywhere) but only in sort term (easily out of date) 2. The complexity of problems being face in daily life 3. The uncertainty and unpredictable of surrounding situation (politics, economics and social culture) De Geus (1997) defined the two types of commercial company; 1. Economic company, the company is focusing only to get profit. Once the business is on crisis, it goes down 2. River company, the company is adopting the river philosophy by changing at times to it lives longer He also defined four characteristic companies that live longer; there are sensitivity to environment changing, strong corporate identity, tolerance to differences and build trust (within and outside) and invest rationally. Therefore in knowledge era, organization needs to have the ability to change with times. It is relying on intangible asset that depend on people mind setting. Thus will result to create knowledge management through learning organization that will become the competitive advantage. Learning organization needs learning environment that is conducive. It is essential in knowledge management process. The organization or company which has a willing to learn and able to adapt with changes will have competitive advantage to live longer than others. However, it has to be harmony and balance with the human capital readiness such as a mature human capital with global competency, good ethics and creative and innovative. Besides intellectual, the harmony of spiritual and emotional has become the important aspect to create the balance. Work life needs 80% emotional intelligence and only 20% intellectual intelligence (Goleman, 1995).

2. Why Indonesian Reformation Is Very Slow?

The speed of reformation in Indonesia has not come to our expectation. It progress very slow and give the impact to country business performances. There are some reasons why Indonesia could not give the easier access in running business. There are; 1. Our nation is losing its sensitivity (some companies are in the comfort zone) 2. The reformation is gone too far along with low mentality of the people

3. Communities are losing their identities (patient, wisdom and confidence) 4. Our society is obsessed by the past glory 5. Close minded (only think for the short time) 6. Our nation is still getting used to justify habits than the truth 7. Human capital has not yet reached critical mass 8. The crisis of true leadership (servant leadership)

3.Knowledge and Human Learning Process

Nonaka and Hirotaka (1995) described that an organization need to understand two aspects that has to develop continuously in this information era. There are explicit knowledge (know how) and tacit knowledge (know why). Then there are three types of knowledge to understand; 1. Cultural (assumption, norms and values) 2. Tacit (conceptual and theory) 3. Explicit (cognitive, procedure) Spencer (1993) has divided competency into two; there are technical competency (hard competence or skills) and behavior competency (soft competence or skills). A person who is fool or stupid in this knowledge era can be describe as someone who does not want to change at times (lack of hard skills) or could not change and adapt to the new era (lack of soft skills). However, human can learn and grow, as they are categorized both of rational and spiritual person. Organization potential asset is learning human. There are two types of learning, unlearning (leave old habit/concept) and pro-learning (understanding new knowledge). There are two types during human learning process. There are; 1. Single loop learning, it is when knowledge touch human minds, 2. Double loop learning, it is when learning process touch human minds and human soul In the era of knowledge economy, organizational capital can be divided into two. There are the physical capital and virtual capital. Physical capital investment is obtained as a result of investors, while Ross (1996) states that the virtual capital organization as intellectual capital, capital that does not look real, but provide great added value for stakeholders. Learning organization can be successful achieved by having competent human resources, good learning habitat, good leadership, quality of resources (infrastructure), and organization character along with reward scheme.

4. Individual Learning Model

4.1 Single loop and double loop Argyris and Schon (1978) described that individual learning in a single learning cycle (single loop), including how to generate new methods or new action strategies to achieve the existing values. At this stage, values, beliefs and customs of people do not change. It just the way things work and other technical. In contrast with multiple cycles (double loop), we learn to transform "the field of constancy itself" i.e. change the destination (goal) to adjust to the environment Jann Hidajat`s learning individual model is ability in his environment (outside in) and change or actualizes himself (inside-out). Thus he can contribute at least the best for him, and more broadly to create prosperity for the organization, the community or the environment.

Figure 4.1 Jann Hidajat`s Individual Learning Model Spencer (1993) divided three groups of employee competencies. There are intellectual competency (intellectualability), emotional competency (ability to control themselves), and social competency (warm and intimate with other people).

4.2 Organizational Learning Model

Learning organization is organization that has capability to change continuously and improve their capabilities because the employees have commitment and individual competency to learn and share knowledge. Nonaka and Hirotaka (1995) defined that organizational learning as knowledge process creation converting between the personal, tacit knowledge of individuals who produce creative insight, and shared, explicit knowledge, which the organization needs to develop new product and innovations. March and Olsen (1975) defined the organizational learning process through OADI (Observe-Assess-Design-Implement). Then Kim (1993) integrated the concepts of OADI-SMM with single cycle learning and multiple cycles learning, both at the individual level and learning at the level of organizational learning. Crossan et al (1999) said that the flow of learning is 4I`s (Intuition, Interpretation, Integration, Institutionalization) Jann Hidajat`s organizational learning model (2001), the concepts are single loop (integrate intellectual and emotional) and double loop (integrate intellectual, emotional and spiritual through thinking process and soul).

Figure 4.2 Jann Hidajat`s Organizational Learning Model

5. Knowledge Management in Learning Organization

Knowledge management becomes company successful factor because the new economic era will refer to the knowledge era. Knowledge management represents a progressive logic of meaning beyond information management, as it is influenced by the quality of work environment and also information technology. Therefore knowledge management is seen as the embodiment of integration and the culmination method of existing organization. Intelligence learning organization is an organization that has capability to growth its strength continuously based on knowledge and service. There are three eras of learning paradigm shift: 1. TQM paradigm era that focus to build working process and get zero defects, high quality and kaizen (continues improvement). 2. Learning organization paradigm era that focus to thinking patterns 3. Institutional learning discipline paradigm era: knowledge as learning organization discipline

6. The Pillars of Learning Organization

In the context of organizational change means an organization's ability to adapt to adapt to changes in its business environment. To ensure the process of learning and the transformation of knowledge from individual study results into a learning organization needs three pillars of learning organization; 1. Individual learning pillar The three characteristics of mature people have are intellectual maturity, emotional maturity and social maturity. People successfulness depends on thinking process and soul process. Thinking process has 4 steps, observation process, self-reflection process, change of thinking way and actualization process. Soul process (Double loop learning) steps are change of vision process, paradigm alignment process, understanding of why and knowledge of care why. 2. Learning organization pillar. The differences compare to individual learning pillar are quantity and institutional process. Learning organization also need double learning loop (vertical) to create culture/habit and become the place for individual. Thus organization-thinking process will create new tacit knowledge and then change tacit knowledge to explicit knowledge.

3. Knowledge path transformation Pillar. It is transformation functions that combines and synergize individual knowledge become organization human capital. The five learning disciplines according to Senge (1990) are personal mastery discipline, sharing vision, mentally model, systematic thinking and learning team.

Figure 7.1 Jann Hidayat`s Pillars of Learning Organization

7. Learning Organization Building

The process of learning organization is a process of interaction among members of the organization. It required a conducive learning habitat along with technology support. Jann Hidajat`s learning organization building are; 1. Foundation: Trust and Learning culture Trust is a foundation to build understanding, tolerant, positive attitude, and ethical behaviors. Learning culture is defined as value of trust or daily activity that create sharing and knowledge combination between organization employees.

2. First pillar is learning skills. Skills needed are skill to solve the problems, using new methodology, learning from the past, learning from success (benchmarking) and skill to transfer knowledge to other people. 3. Second pillar is earning facilities, consist of: systemic information, organization structure and rewards. Systemic information that gives easy access to knowledge sources around the world, organization structure to create quality habitat in learning organization that impact to employees relationship effectiveness. The rewards use for formal recognition. 4. Roof is a learning discipline as protection from internal negative environment or external negative environment. 5. Enabler is leader quality that functions as informant, as visionary, as coaching and as agent of change. The outcome of learning organization is human capital. Described as the capacity of the organization to continue to learn discipline on an ongoing basis, broaden and deepen the intellectual capital, social capital as a result of the process of organizational transformation of the entire intellectual competence, emotional competence and social competence are owned by the members of the organization, through the medium of the five disciplines of organizational learning.

Figure 7.1 Learning Organization Building

8. Empirical Study of Learning Organization Building Concept Implementation

Learning organization is an organization that able to transform knowledge cyclical and sustainable, from individual learning into organizational learning to generate human capital organization as competitive advantage. Senge (1990) said that learning organization need learning discipline in order to create learning habitat. The five learning disciplines are personal mastery, shared vision, mental model, systemically thinking, and learning team. However, there are some obstacles in order to build the learning habitat, there are; 1. 2. 3. 4. Personal obstacles, especially intellectual maturity ad emotional maturity Lack of relational learning support (trust, learning culture and leadership) Lack of managerial support Lack of learning infrastructure

Moreover, an empirical study defined some points to build learning habitat, there are; 1. 2. 3. 4. 5. 6. Trust and learning culture will improve the quality of learning habitat There is correlation between trust, learning culture and the quality of learning habitat Good leadership could strengthen trust and learning culture Good leadership could improve employee maturity Individual learning process is organization learning process starting point Learning organization process could happen by sharing knowledge within employee

Great leadership is needed when the learning habitat is not conducive. Reward could also be used as motivator. In this condition, information availability could impact knowledge transformation process.

9. Getting Started
There are two formulas to develop a learning organization; 1. Formula 1: Learning Organization = (Leadership) * (Learning Foundation) * (Learning Skill) * (Learning Facilities) * (Learning Discipline) 2. Formula 2: Learning Organization = (Leadership) * (Performance) * (Knowledge Sharing) * (Explicit Knowledge) * (Implementation)

There are also some obstacles in order to build the learning habitat based on research, such as; 1. Personal obstacles, especially intellectual maturity ad emotional maturity 2. Lack of relational learning support (trust, learning culture and leadership) 3. Lack of managerial support 4. Lack of learning infrastructure Therefore, to success during culture transformation to build the learning organization are commitment, start from the small, set target and spread issues to make other employees realize about the change. The steps to start building learning organization are; 1. Decide pilot project 2. Implementation steps According to Peter Sange in his book The Danc of Change Generating Profound, the implementation of building learning organization will go through three steps, there are; a. R1: building individual learning skill to achieve personal mastery b. R2: building learning team capability to improve the effectiveness of knowledge process sharing c. R3: building learning organization capability, to get Human Capital 3. Maintaining profound change process at every step, so that it will create a sustainable learning process. In conclusion, the need of organization that able to maximize the competence of their human capital through learning organization in order to face the intensive competition is highly challenging, especially in this globalization era. Therefore, build trust within the people inside the organization is needed in order to create a conducive learning habitat. It is a long journey that requires a great leadership.