People-focused knowledge management

Enterprise Strategy
Level
Division Business Plan
Level
Personal Operations
Level
Department Tactics
Level
Figure 6-6
Enterprise situation-handling takes place on many levels. Copyright © 2001
Knowledge Research Institute, Inc. and Karl M. Wiig. Reproduced with permission.
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The model outlines the structure of the situation-handling process
from beginning to final action. It incorporates understanding from
recent research and practical experiences, as well as the role of stories
for equipping people and organizations to become proficient and it
ties the integrative effects of stories to the building of knowledge in
the form of mental models and structural IC assets. In addition, the
model provides a framework for analyzing and synthesizing personal
and organizational action-oriented processes.
Many of today’s business problems are knowledge-related, as are
many of today’s business opportunities. Unfortunately, people in
general have limited insights into the knowledge-related processes
and mechanisms that affect business performance. Hence, many pro-
blems are not recognized, and many opportunities are missed. The
situation-handling model provides an easily explainable framework
for understanding knowledge-based action-oriented activities that are
of direct importance to business.
Enterprise Situation-Handling Model Insights
The model relies extensively on the role of previous experiences
such as reference models (for example, patterns and paradigms) in
personal and organizational situation-handling. The model explains
action-oriented functional operations and partitions the process 
into separate tasks. That allows us to describe the general resource
requirements, operations, and limitations of these tasks from the
knowledge perspective. In its focus on knowledge, it identifies in the
aggregate the nature and roles of personal mental models and orga-
nizational reference models for performing the primary tasks.
The situation-handling model becomes a vehicle for providing
everyone within the organization with general insight into the roles
of personal and structural IC assets for delivering competent work.
Such widely distributed insights are key in organizations that pursue
knowledge vigilance and build a knowledge-aware intangible assets
management mentality among its employees. Such a mentality creates
a knowledge-friendly culture and fosters collaboration, and IC assets
focus on planning and daily operations. The model integrates under-
standing from several fields into a single structure. It borrows from
cognitive sciences, management theory and science, information tech-
nology, and management and social sciences.
The situation-handling model provides several important in-
sights. Whereas the model is knowledge-centric, other enterprise 
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contexts also facilitate — or hinder — effective situation-handling.
They include:
Widespread rank-and-file understanding of enterprise strategy
and intent.
Personal understanding by everybody of “What’s in it for me?”
by participating in implementing enterprise strategy.
Individual motivation fostered by providing independence,
recognition, and permission in order to shape work products to
serve individual contexts and enterprise intents and to be per-
mitted to engage in fulfilling work.
Role models provided by the consistent behavior of enterprise,
business unit, and department managers and leaders.
Natural work processes and practices that represent preferred
ways of working.
General knowledge-leveraging mentality built on understanding
the power of maintaining and applying competitive knowledge
and other intellectual capital (IC) assets.
In most of these cases, deliberate and systematic management of
knowledge-related processes and activities (knowledge management)
becomes a cornerstone for success.
A competent person will understand the context and fundamental
nature of new and slightly different situations and readily initiate and
pursue options and innovate within her Action Space and Innovation
Capability. However, she may at times be uncomfortable and un-
willing to consider actions outside this domain that prevent effec-
tive behavior. Hence, an assembly worker experiencing quality prob-
lems with parts supplied by another department may not wish to
diagnose the situation. Instead, she may only feel comfortable by fol-
lowing accepted procedures for reporting the issues to the supervisor
who then will handle the problems “by the book.” With better con-
textual knowledge and with increased motivation, authority, and
independence, she will develop a broader Action Space and In-
novation Capability and might feel comfortable about contacting the
supplying department directly to fix the problem quickly and pro-
ductively without added supervisory overhead. Unfortunately, per-
sonal and organizational constraints often cause better and more
effective actions to fall outside workers’ Situational Awareness,
Action Space, and Innovation Capability. That hinders effective
Sensemaking and Decision-Making/Problem-Solving. Similar con-
straints exist in Situational Awareness, Action Space and Innovation,
Enterprise Situation-Handling
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Execution Capability, and Governance Competence and can often
limit the effectiveness of the situation-handling tasks and thereby
contribute to impaired enterprise performance.
A new generation of KM systematically and deliberately provides
precisely such understanding, knowledge, and empowerment of indi-
viduals and enterprise departments alike. Understanding the mecha-
nisms that underlie situation-handling models provides significant
insights. By analyzing activities within the enterprise, its work func-
tions, personnel capabilities, and competence from these perspectives,
KM may be used to improve the enterprise’s effectiveness apprecia-
bly. It is possible to improve knowledge diagnostics, practical knowl-
edge transfer by, for example, learning on the job and focusing on
stories in addition to memorizing facts and principles. It is also very
important to secure the availability of pertinent knowledge at the 
point-of-action and just-in-time, provide synthesis of effective 
knowledge-related efforts, and foster new practices, to name a few.
The four functional proficiencies (Situational Awareness, Action
Space and Innovation Capability, Execution Capability, and Gover-
nance Competence and Perspectives) constitute important practical
issues in any organization. Fortunately, many limiting factors in per-
sonal situation-handling can be alleviated by increasing employees’
task and general knowledge. Of particular importance are their
understanding of enterprise goals and how they, as individuals,
benefit from working effectively. Organizational situation-handling
can also be enhanced by building structural intellectual capital in
many different forms within the enterprise. Experiences indicate that
action-oriented enterprise policies and practices increase both per-
sonal and enterprise Action Space and Innovations and Execution
Capabilities, resulting in improved business performance. When
guidelines and policies are flexible and people understand the desired
enterprise direction, they pursue enterprise intents to a greater degree
by innovating and adjusting actions to fit the circumstances. With
such an understanding, employees truly participate in implementing
enterprise strategy.