Assessing the firm's strategic knowledge portfolio: a framework and methodology

It is now widely acknowledged that knowledge rather than capital assets is the source of wealth in today's global economy in which firms increasingly are competing in knowledge-intensive markets. Consequently, firms are seeking to gain a better understanding of how their organisationally-embedded knowledge can be exploited to gain and maintain competitive edge in a turbulent marketplace. To be competitive and successful, firms are creating and sustaining a dynamic portfolio of knowledge repositories and processes. The authors contend that the outcomes can be much enhanced if this is based on a systematic approach to knowledge management. A consensus in leading edge firms about the importance of knowledge has resulted in considerable investment in the analysis of technology portfolios and such processes as technology mapping. Nevertheless many firms, particularly smaller and medium enterprises, have still not translated a concern for improved knowledge management into even the most rudimentary analysis. Consequently, many firms do not have the means for really understanding the strategic impact of their knowledge capital on their competitive performance. Practical tools and methodologies which assist in this process of assessing the breadth and depth of an organisation's knowledge portfolio can assist significantly in such cases in enabling firm's to get the key issues onto the board agenda. In this paper the authors present a conceptual framework for mapping a firm's knowledge portfolio in terms of four domains - content, process, infrastructure and culture. The mapping approach is designed to help guide the thinking process in the firm with respect to ways in which its knowledge is being created, stored and applied towards competitive advantage. The methodology begins with a mapping of the firm's business processes from a knowledge perspective. Core business processes are unbundled in terms of their specific knowledge domains. They are subsequently classified according to their degree of tacitness. Next, the competitive impact and competitive positioning of each area is evaluated and compared to the principal competition. Gaps in the firm's knowledge portfolio are identified; a strategic framework is provided for a proactive approach to strategic knowledge management. The methodology provides a systematic approach to building a strategic knowledge map. It represents a strategic tool for assessing a firm's knowledge portfolio - it is a map pointing to where knowledge resides in the firm; to key knowledge processes; and to the flow of knowledge between processes and between people.