Does Knowledge Sharing Pay Off?
Some techniques seem to drive new product development better than others.
The benefits of knowledge management are often accepted as a given, but its role in producing specific desired outcomes is not well known. Recent research employs survey-based and qualitative analysis to determine the effectiveness of various knowledge management methods in driving and supporting new product development.
“Trends in new product development include decreasing time of development and increasing product complexity,” explains researcher Anja Schulze, project leader at the University of St. Gallen Institute for Technology Management. Since new products derive in part from acquiring new knowledge, she says, it stands to reason that companies that can create knowledge faster and more comprehensively will keep their competitive edge.
Schulze and researcher Martin Hoegl, assistant professor of management at the Bocconi University School of Management, asked research and development managers at 33 companies — including Royal Dutch/ Shell, ABB, Siemens, BP, Volkswagen, IBM and Hewlett-Packard — about new products they had brought to market in the past three years. The researchers then surveyed 356 engineers and other individuals involved in 94 projects to determine their familiarity and satisfaction with 14 discrete knowledge management methods. Representatives from the 33 companies were then brought together in a workshop, where they discussed the survey results and shared perspectives.
The results of the study and its implications were documented by Schulze and Hoegl in a June 2004 Bocconi University working paper, How to Support Knowledge Creation in New Product Development: An Investigation of Knowledge Management Methods. Their research reveals that managers are familiar with a range of knowledge management techniques, and they rate some higher than others in terms of supporting product development. The 10 highest-rated mechanisms for sharing knowledge were, in order, informal events, experience workshops (wherein team members review completed projects), communities of practice, project briefings (knowledge transfer prior to beginning new projects), expert interviews, best practice cases, knowledge brokering (third parties connecting knowledge seekers to knowledge sources), experience reports (documenting positive and negative experiences on projects), databases and professional research services.
These rankings suggest that practices with lower satisfaction ratings, including electronic discussion forums and knowledge maps, may be less effective at creating new knowledge. The researchers are quick to point out, however, that they did not control for factors such as the size of the project or the resources committed to the method, so the study itself is not an indictment of lower ranked techniques.
In follow-up interviews, R&D managers discussed how knowledge management helped, in practice, to develop better products. For instance, managers at the Royal Dutch/Shell Group used storytelling, which they shared globally, to reinforce their use of the knowledge management mechanisms mentioned above. Managers at Volkswagen AG discovered unexpected benefits from their lab-expert network, a community of practice intended to collectively deepen their expertise through interactions with those who share common concerns, problems or interests. They noticed that, apart from the actual knowledge exchange, analysis of the questions discussed in the network reveals both competencies and knowledge gaps in the company. Consequently, they are able to take specific measures to increase employees’ qualifications and hence enhance the company’s competitiveness.
Ultimately, say the authors, calculating the effectiveness of any particular knowledge management effort must balance measuring the popularity of the activity (how often users draw upon the particular method) with measuring results (how users say the method has contributed to knowledge sharing or knowledge creation and, by extension, to the development of successful new products). Short of conducting a causal analysis on a sufficiently large number of new product development projects within a company, they conclude, such an approach may well provide adequate insights.
For more information, contact the authors at martin.hoegl@unibocconi.it and anja.schulze@unisg.ch.