How to balance supply and demand in Knowledge Management
If we view the flow of knowledge within an organisation as a Market, then we need to address the issues of supply and demand of knowledge within that market.
One way to look at the flow of knowledge within an organisation is as a market connecting the suppliers of knowledge and users of knowledge. The knowledge suppliers are the experienced staff in whose minds the knowledge is buried, the users are the people and teams who need access to that knowledge, and the market is the means of connecting the two.
Knowledge is created through experience and through the reflection on experience, in order to derive guidelines, rules, theories, heuristics and doctrines. Knowledge may be created by individuals, through reflecting on their own experience, or it may be created by teams reflecting on team experience. It may also be created by experts or communities of practice reflecting on the experience of many individuals and teams across an organisation. The individuals, teams and communities who do this reflecting can be considered (in the Market model) as ‘knowledge suppliers’.
Knowledge is applied within organisational activity by individuals and teams. They can apply their own personal knowledge and experience, or they can look elsewhere for knowledge – to learn before they start. The more knowledgeable they are at the start of the activity or project, the more likely they are to avoid mistakes, repeat good practice, and avoid risk. These people are ‘knowledge users’.
Once we have knowledge suppliers and users, we have a marketplace for knowledge, where suppliers and users come together and exchange a “commodity” – knowledge. Knowledge is not like a normal commodity in that the supplier does not lose the knowledge, and both supplier and user get to keep the knowledge which has been exchanged. However a marketplace analogy is a popular one in KM terms, and its an analogy I would like to use here to explore the issues of supply and demand.
Supply and Demand
- When demand exceeds supply there is a shortage in the market, and prices rise until demand decreases
- When supply exceeds demand, there is a glut in the market and prices fall until demand increases.
The Knowledge Market
- Where there is low supply and low demand, there is no knowledge market at all. This is where most organisations start their KM journey.
- Where there high supply and high demand, there is an equilibrium knowledge market, and to reach this level should be the Knowledge Manager’s goal.
- Where there is high supply and low demand, we find the typical problem area of knowledge oversupply. Here we find the huge databases nobody ever reads, the massive lessons learned systems with no lessons re-use, the communities or social groups where announcements and notifications outweigh the questions. The effect of this oversupply is both to introduce waste into the system, and also to destroy value. Larry Prusak said that the best way to de-knowledge knowledge is through oversupply. Oversupply would not be problem if the price/cost of the knowledge dropped to compensate, but in fact the opposite happens. The more you oversupply knowledge, the more time and effort it costs to search, sift and sort through until you find the knowledge you need. Oversupply increases cost and decreases demand even further. Avoid this trap!
- Where there is low supply and high demand, we find the less typical problem area of knowledge undersupply. Here we find lots of people looking for knowledge, but little knowledge to find. The effect of this undersupply is to make people look harder, and to seek for knowledge even if it is not yet documented. They start asking people, talking to people, and eventually finding knowledge in its richest state – tacit knowledge. What documented knowledge exists becomes highly valued. This is a better state to be in, so long as you can increase the supply before people start to give up.