‘Knowledge strategy; a key resource for organisations’ competitiveness’

Today, knowledge is considered the most strategically important resource and learning the most strategically important capability for business organisations. However, many initiatives being undertaken to develop and exploit organisational knowledge are not explicitly linked to or framed by the organisation’s business strategy.

In fact, most knowledge management initiatives are viewed primarily as information systems projects. While many managers intuitively believe that strategic advantage can come from knowing more than competitors, they are unable to explicitly articulate the link between knowledge and strategy.

Michael Zack, an organisation development expert notes that Business organisations are coming to view knowledge as their most valuable and strategic resource, and bringing that knowledge to bear on problems and opportunities as their most important capability.

Zack points out that an organisation’s strategic context helps to identify knowledge management initiatives that support its purpose or mission, strengthen its competitive position, and create shareholder value. Intuitively, it makes sense that the firm that knows more about its customers, products, technologies, markets and their linkages should perform better. However, the link between knowledge management and business strategy, while often talked about, has been widely ignored in practice.

He further maintains that many executives are struggling to articulate the relationship between their organisation’s intellectual resources and capabilities, and its competitive strategy.

“They do not have well-developed strategic models that help them to link knowledge-oriented processes, technologies and organisational forms to business strategy, and are unsure of how to translate the goal of making their organisations more intelligent into a strategic course of action. They need a pragmatic, yet theoretically sound model of what I call knowledge strategy”, he said.

Highlighting the benefits of knowledge based resource strategy to achieving organisational goals; Zack noted that sustainability may also come from an organisation already knowing something that uniquely complements newly acquired knowledge, providing an opportunity for knowledge synergy not available to its competitors.

According to him, “New knowledge is integrated with existing knowledge to develop unique insights and create even more valuable knowledge. Organisations should therefore seek areas of learning and experimentation that can potentially add value to their existing knowledge via synergistic combination”.

He insists that a resource-based strategy provides a more long-term view than the traditional approach, and one more robust in uncertain and dynamic competitive environments. “Competitive advantage based on resources and capabilities therefore is potentially more sustainable than that based solely on product and market positioning”.

Having performed a strategic evaluation of its knowledge-based resources and capabilities, an organisation can determine which knowledge should be developed or acquired. To give knowledge management a strategic focus, the firm’s knowledge management initiatives should be directed toward closing this strategic knowledge gap.

The important issue is that the knowledge gap is directly derived from and aligned with the strategic gap. This simultaneous alignment of strategy and knowledge is a crucial element of a firm’s knowledge strategy.

“In many firms, knowledge management efforts are divorced from strategic planning and execution. However, having an appropriate knowledge strategy in place is essential for assuring that knowledge management efforts are being driven by and are supporting the firm’s competitive strategy”. He sums