Your say: KM down under

Australia and New Zealand have made significant headway in adopting knowledge-management practices across the private and public sectors. Both governments are committed to the discipline and have endorsed it as a strategy essential for economic growth in the region. However, surveys continue to show insufficient levels of investment into knowledge when compared to other OECD countries. Sandra Higgison looks at the roots of KM down under and evaluates its future.

The initial images conjured when thinking of countries ‘down under’ are of barbeques, spectacular landscapes and a curious collection of marsupials and poisonous creatures. When it comes to knowledge management, observers see that the academic, public and private sectors in Australia and New Zealand have granted the discipline varying levels of acceptance and commitment. Australia is the stronger of the two neighbours in terms of KM uptake so far, and can point to a government-led drive that, it is hoped, will transform the country into a ‘knowledge nation’. As a considerably smaller country, New Zealand tends to look beyond its shores to bring in knowledge-management expertise. However, much publicised initiatives are also afoot that aim to build understanding of the benefits of knowledge creation and innovation.

By the late 1990s, the knowledge-management movement was well underway in Australia, although Karl-Erik Sveiby, professor in knowledge management at the Swedish Business School in Helsinki and principal of Sveiby Knowledge associates, recalls earlier rumblings. “I remember the first seminar on KM that I held in Sydney in 1995,” he says. “There were 15 people in the room and it was new to all of them. The main question being asked at the time was, ‘Where’s the money in this?’” A question that is still pertinent today. However, KM’s real impact wasn’t felt until a few years later.

In 1998 Delphi produced a report on knowledge management in Australia and New Zealand, which stated that 62 per cent of the organisations surveyed claimed that they had explicit initiatives for capturing and distributing corporate knowledge. “This demonstrates a serious commitment towards the concept,” says Frada Burstein, associate professor at Monash University. Today, the increasing number of students enrolling on the knowledge-management units offered at the School of Information Management and Systems at Monash also indicates the strong interest in learning about the topic. “I hear similar stories from my colleagues around Australia,” says Burstein. “These courses and degrees have been created in response to industry’s demand for professionals trained at university level.”

New Zealand has seen similar support from its public and private sectors. Shantha Liyanage, co-author of Investing in Knowledge Capital1 and associate professor of technology and innovation management at the University of Auckland, believes KM really took off about two years ago in New Zealand. “Considerable interest in the subject was generated by the Knowledge Wave conference in 2001, which involved government, academia and industry,” he says. At the event, leaders from each sector gave a commitment to turn New Zealand into a ‘knowledge economy’. Gerry McCullough, head of information systems and technology at the Open Polytechnic of New Zealand, also refers to the event and the ongoing ‘Catching the Knowledge Wave’ project, a joint initiative by the New Zealand government and the University of Auckland, supported by business and community groups. “One of the aims is to determine how the country can benefit from knowledge creation and innovation, as this is seen as the key to success in a global economy,” he says.

Other government initiatives in both New Zealand and Australia echo this sentiment. In 1999, the Australian government shone the spotlight on knowledge management. “The political impact has been quite significant,” says Sveiby, “at least in the government’s slogans. In 1995 I lived in Australia, in the state of Queensland, which called itself ‘the sunshine state’. Queensland is now ‘the smart state’ in the ‘knowledge nation’.” The e-government initiative in New Zealand also places knowledge management high on the agenda. “It’s an ambitious strategy that aims to help the public sector to work as a single, integrated operation by 2004,” says McCullough. “This has critical implications for the management of knowledge and information in the sector.”

In response, public-sector organisations have taken considerable steps to adopt KM principles themselves. “The pragmatic implementation of KM at the state and government level is a series of bottom-up initiatives,” says Burstein. “Practitioners from public-sector organisations have formed communities of practice in a virtual environment that meet regularly and exchange experiences in formal and informal forums.” But Rahmon Coupe, CEO at Your Amigo, a provider of search and retrieval software believes that this development is being hindered by a lack of internal expertise. “Use of KM in government is somewhat varied,” he says. “This ranges from the use of efficient to inefficient systems, while also failing to provide sufficient resources, budget and expertise to tackle the problem effectively.” In fact, the overall impact of initiatives launched by both governments has been called into question.

Burstein argues that she has seen little evidence so far that the ‘knowledge nation’ title has had much, if any, effect on Australia as a whole. A report comparing the performance of OECD countries on this subject found that, “Australia is falling well behind most of the major developed nations in investing in knowledge. As a result Australia is putting its future position in a knowledge-based world at risk.”2 Having adopted Australia as his home, Sveiby has also noticed the difference between the slogans and the reality. “Recent analysis shows that Australia is lagging behind the rest of the OECD countries in terms of investment in knowledge,” he says. “The country is still investing more in traditional tangible fixed assets than most other OECD countries.”3 Despite these findings, there are several pioneering companies in the region that are encouraging adoption of KM across industries.

Multinational organisations, in particular, were the first to adopt knowledge-management practices in the region. Examples include the big banks, such as the Reserve Bank of New Zealand, Westpac, NAB and the Commonwealth Bank of Australia; professional-services companies, notably the big five accounting firms; and various other large corporations. Liyanage recalls that some of the early adopters were traditional companies, such as Carter Holt Harvey, a wood-fibre company that recently celebrated its 100 anniversary. “The most prevalent factors on the use of knowledge management are external pressures and globalisation,” says Liyanage. “Firms that were not innovative found it difficult to survive.” However, this pressure has been a double-edged sword in New Zealand. As the cost of buying in KM expertise can be prohibitive, the tough economic climate has kept thoughts focused on survival and profitability. This may help to explain why some major companies only began to take their KM practices seriously in the past couple of years.

There are also other obstacles that knowledge management must overcome. Geography can be a hindrance. “New Zealand’s isolation means that we tend to rely on ‘kiwi ingenuity’ – problems get fixed but not necessarily using a standard approach,” says McCollough. Burstein quotes historian Geoffrey Blainey when describing the geographic constraints faced by Australia as “the tyranny of distance”. However, globalisation and the ever-increasing sophistication of technology will help reduce these distances. The more pressing challenges to consider are cultural and economic.

Teleos, an independent research firm, has awarded many of the multinational organisations that have helped develop knowledge management in Australia Most Admired Knowledge Enterprises (Make) awards, demonstrating their influence on the industry and in the region. However, the global nature of these firms can present one of the cultural challenges facing KM here. “Some respondents to a survey we carried out of the professional-services sector have indicated that they find obstacles to KM implementation are often caused by the differences between the organisational cultures at the head office and regional offices,” says Burstein.

In general there has been a reluctance to get on the bandwagon. “Part of this was cultural,” he says. “Knowledge will always be regarded as a sacred cow. When KM was emerging there was limited collaboration and people were trapped in a protectionist rather than entrepreneurial and risk-taking mindset.” These issues still pose problems today. According to Coupe, organisational processes and the way people think about information has got to change. “The Australian region has yet to embrace a knowledge-centric approach towards the way people generate and use information within their organisations,” he says. Indeed, it is apparent that knowledge management has evolved slowly in both Australia and New Zealand when compared to other countries. “It has taken two to three years for many companies to even acknowledge KM,” says Liyanage. “There are some consulting firms that promote it, but the tasks of their knowledge managers are more focused on training and learning issues. KM initiatives go beyond this.” And while the industry continues to develop at its own pace, the economy is throwing in its own quota of challenges.

Recent shifts within the IT market have had a pronounced influence on the discipline’s evolution, for example. Australia has a fairly well established industry of vendors and consultants offering KM solutions. In contrast, New Zealand has few companies dedicated to these issues. “New Zealand has a small population, so specialist expertise is naturally limited. Companies tend to look overseas to source consultancy services,” says McCollough. Regardless, both countries are finding that the current economic climate is restricting growth. As KM was initially classed as an undertaking for the IT department, the slump in the technology industry and drastic reduction in IT spend over the past three years has taken its toll. Not only are companies now looking for guaranteed ROI from their investments, they are far more careful over their choice of solution. “The focus has shifted onto long-term viability, in contrast to increased capability,” says Coupe. “This has directed attention away from technology and toward the management of information resources.”

There is no doubt that KM has established a firm foothold in the region and looks likely to follow global trends as it matures. “Australia is following the patterns of the rest of the world,” says Sveiby. “IT issues dominated first, and now culture issues are high on the agenda.” And he hopes that this trend in favour of the softer issues will continue. Burstein agrees that fewer companies still consider KM to be a purely technological subject.

“In our 2001 study, 85 per cent of respondents said that KM was a business issue associated with the collection of processes that govern acquisition, creation and dissemination of knowledge to fulfil organisational objectives,” she says. Subjects on today’s KM radar include communities of practice, storytelling and ROI evaluation, with portals considered the preferred technology solution. Although it may appear that KM has yet to fully deliver on its promises down under, there are moves to build the foundations that will allow its future growth.

Practitioners are aware of the challenges facing knowledge management and are working to meet these head on. “KM practices have to evolve,” says Liyanage. “The rationalisation of resources means that people will have to do things collaboratively. It is a business imperative.” He would like to see educational institutions play a bigger role here, as he feels they are currently restricted by traditional disciplinary boundaries. “I think the best place to start KM in countries such as New Zealand is within schools,” says Liyanage. “The young generation is more receptive and attuned to change and will embrace new ideas.” Liyanage is leading a project, Biowiz, which aims to inspire young people to think more creatively by developing their skills and introducing them to an entrepreneurial culture. Such projects will go a long way to improve the development of knowledge management within the region. In fact, in spite of the challenges KM faces in Australia and New Zealand, the seeds for growth have been sown. Its role as an essential enterprise-wide strategy that will deliver long-term business benefits is well rooted and is one that we should see flower soon. n

Frada Burstein is associate professor at Monash University. She can be contacted at frada.burstein@sims.monash.edu.au

Rahmon Coupe is CEO at Your Amigo. He can be contacted at rahmon.coupe@youramigo.com

Shantha Liyanage is associate professor of technology and innovation management at the University of Auckland. He can be contacted at shantha.liyanage@auckland.ac.nz

Gerry McCullough is head of information systems and technology at the Open Polytechnic
of New Zealand. He can be contacted at gerry.mccullough@openpolytechnic.ac.nz

Karl-Erik Sveiby is principal of Sveiby Knowledge Associates. He can be contacted at karlerik@sveiby.com

References

1. Liyanage, S. & Jones, A. J., Investing in Knowledge Capital (Singapore Management Institute, 2002)

2. Considine, M., Marginson, S., Sheehan, P., Kumnick, M., The Comparative Performance of Australia as a Knowledge Nation (Chifley Research Centre, 2001)

3. Woods, J., ‘Australia: An under-performing nation’ in Journal of Intellectual Capital (Emerald, Vol 4 No 2, 2003)