People-focused knowledge management

Historic Knowledge
Knowledge Management of
Intellectual Capital
Information Management of
Information Capital
Tacit & Explicit
Knowledge
Intellectual
Capital
information
Capital
Resulting
Behavior
Data &
Information
Aggregated
Business
Function
Detailed
Activity or
Business
Tasks
Knowledge
Required
to 
Perform
Activity
Decision
Followed
by
Execution
of
Action
Detailed
Information
Items
Required
to
Perform
Activity
General
Information
Items
Required
to Perform
Business
Tasks
Information
System
Building
Blocks
Knowledge
/ IT Apps
Knowledge
Bases
(KB)
Knowledge
Discovery
in Data
Bases
Cumulated
Operating &
Performance
History
IT-Based Knowledge Management
New Knowledge
Created during Work
Information with Potentials for New Knowledge 
Figure 3-6
Intellectual capital (knowledge assets) matched with corresponding information capital provides the capability to act effectively.
Copyright © 1992 Karl M. Wiig. Reproduced with permission.

---

80
People-Focused Knowledge Management
customer service functions, financial analysis functions, many project
control functions, and hundreds of other examples. However, the
model has proven a valuable tool for people who plan smaller activ-
ities and determine the resources required to collaborate, as well as
people who are responsible for their own education and professional
development.
Knowledgeable and Informed Decisions Deliver Performance
Operational performance depends directly on the merit of the
underlying decisions and actions. Effective actions rely on decisions
that are both informed and knowledgeable. As illustrated in Figure
3-7, decisions based on good information but little knowledge can
be expected to be arbitrary and ineffective. Decisions based on excel-
lent knowledge but little information can also be expected to be in-
effective and often capricious as well. Sadly, often great emphasis is
placed on ascertaining that actions are based on informed decisions,
with less concern for ascertaining that they also are based on knowl-
edgeable decisions.
Context
Knowledgeable
Good and
Relevant
Knowledge
Informed
Good and
Relevant
Information
Context
Objectives
“
Only Informed
”
Decisions without
Good Knowledge Are
Questionable
“
Only Knowledgeable
”
Decisions without
Good Information Are
Questionable
Knowledgeable and Informed
Effective
 Decisions Require
both Good Knowledge
and Information
Situation
Figure 3-7
Three potential outcomes when decisions are both knowledgeable and informed
— or only informed or knowledgeable. Copyright © 2001 Knowledge Research
Institute, Inc. Reproduced with permission.
ch03.qxd 5/3/04 2:35 PM Page 80

---

Actions Are Initiated by Knowledgeable People
81
Goal-Directed Reasoning Relies on Goals, Information, 
and Knowledge
From a knowledge perspective, we are generally interested in
aspects of human reasoning that lead to decisions and actions and
that can be strengthened and be more effective with appropriate KM.
Figure 3-8 illustrates a simplified financial planning situation where
the financial planner’s objective is to help the client make her own
decisions on how to arrange her financial affairs. In this case, effec-
tive, goal-directed human reasoning requires (1) situation and context
objectives to specify the goal-state and guide the reasoning direction,
(2) information to describe the situation and its context, and (3)
knowledge to direct and control the reasoning process by providing
understanding of the situation and insights into how to reason about
it. We need understanding of what is to be achieved and then knowl-
edge and information to make the right things happen.
Knowledge such as:
· 
Investment options and how they may perform
· 
General financial retirement expectations
· 
Opportunities for financing education
· 
Financial planning strategies 
Knowledge to 
frame and direct
reaoning
Goal-Directed