My brother-in-law is an economist by training, and imparted the following wisdom to me last week:  “Every bottle of wine costs no more than $2.50 to produce, the rest is just a lot of hands picking your pocket.” Which got me to thinking: – how do you account for the delta between $2.50 and $40, $60, and higher prices for wine?  I certainly accept the costs, and do not -– as my brother-in-law does -– seek out wine bargains with cost as my only driver.    This gap is the marketplace of intangibles, enabled by knowledge.  Value network analysis ( is the latest business methodology to help firms understand what truly brings value to the enterprise, by capturing the relationships across which these intangibles move.  Knowledge management (KM) is a related discipline, in that it recognizes the intangible nature of knowledge, both individual and organizational. Rather than believing that organizational knowledge dwells in documents or policies; KM, properly applied, extends to encompass the networks across which knowledge flows.

  Prusak, one of the fathers of the KM business field, points to three origins for KM:  ubiquitous computing, globalization, and a knowledge-centric view of the firm.  It has both intellectual and practice antecedents.  Intellectual areas include economics, sociology, philosophy, and psychology.  Practice areas include information management, quality movement, and human capital movements.  The coming together of these practice areas, informed by these intellectual disciplines, is termed – unfortunately – “knowledge management.”

  Snowden, another of these fathers, writes of three generations of KM over the past decade or so:  1. Information for decision support (spurred on by the technology revolution, which was dominated by perceived efficiencies of process engineering);

2. The “SECI” model (popularized in a book by Nonaka, and purported to show the movement of knowledge from tacit to explicit – Socialization to Externalization to Combination to Internalization).  This led to many unfortunate attempts to “capture tacit knowledge” or “make tacit knowledge explicit through technology,” etc.  A field day for IT vendors, and a black eye for the KM profession through frustrated objectives;

3. A recognition that knowledge is paradoxical – a flow (context) as well as a thing (content).  context is highly dependent upon individual and group cognitive processes, which cannot be captured in a computer (for one: we are pattern processors, computers are information processors). 

  There are voices who disagree with these two gentlemen to some degree, particularly Snowden who is a delightfully confrontational Welshman who is trying to bring the insights regarding complexity into the KM field.  Others believe knowledge is all flow, there is no knowledge in static artifacts; while still others believe the task is to enhance “knowledge processing” to produce more and better “knowledge.”

  A shaky foundation, for which I apologize, but I want to illuminate discord as well as agreement as we go along. 

  To close this first episode, I had a conversation yesterday with a former DoD SESer, who observed that with computing, the Pentagon moved the job of information management from secretaries to individuals – and the results were less than satisfactory with regards to storing and retrieving information.  This observation is critical, as we did believe at one point (or at least behaved as if we did) that staff assistants shuffling and filing papers could be replaced by information technology alone.  The system of papers and filing cabinets included the knowledge of the secretarial profession, which was not reproduced by giving everyone a word processor and email.  The need for effective knowledge management is obvious to all, but the implications remain murky for most organizations.