Study Links Knowledge Management, Productivity Gains

By linking knowledge management and organizational learning to improve productivity, multinational firms can save hundreds of millions of dollars, says a new study released by The Conference Board. The New York-based group, in a study sponsored by PricewaterhouseCoopers, asked 200 executives at 158 large global companies about their knowledge-management practices. Eighty percent of the surveyed firms have some form of knowledge-management program in place. BP Amoco PLC and Ford Motor Co. have each generated more than $600 million in savings through these programs. Knowledge management is a broadly defined term that generally means creating, sharing, and using knowledge through an integrated, systematic approach. "Knowledge management is moving into a second stage at many global firms," says Brian Hackett, program manager at The Conference Board. "As e-business continues to change the way companies get their work done, issues involving leadership, motivation, and culture will gain senior management's attention. While productivity and efficiencies have been the initial focus of most knowledge management efforts, building deeper customer relationships and increasing the speed of innovation are ultimate goals of knowledge management." The study found that CEOs are leading knowledge-management efforts at few firms. Among the 25% of companies that have a chief knowledge officer in place, half are not supported by a dedicated knowledge management budget or staff.