Chapter 5: Lessons learned, evaluation, marketing, and the way forward: case studies – Special Libraries as Knowledge Management Centres


Lessons learned, evaluation, marketing, and the way forward: case studies


In the process of transforming the special library into a knowledge management centre, much experience is accumulated. Knowledge-sharing and the involvement of users are critical factors for the success of the knowledge management centre. The special library should motivate people to input their new knowledge assets and to stimulate collaboration among the business units of the organisation because knowledge management is a partnership project. In addition to the organisation’s advantages, the special library benefits from the innovation: it raises its profile and visibility; it is the centre for the generation of new ideas and for the capture of knowledge; and it ensures its continued viability in the ever-changing business environment. The centre should be regularly evaluated and updated. A successful knowledge management centre requires a combination of human, technical and economic skills used in a balanced manner. It requires promotion and marketing and training the users. Some case studies on knowledge management projects are presented at the end of this chapter.

Key words

lessons learned

benefits of knowledge management

new image of the special library

return on investment

internal measurement



case studies

knowledge management centre

Lessons learned

During the transformation of a special library into a knowledge management centre much experience is gathered that generates many ‘lessons learned’ and ‘best practices’. Lessons learned represent local knowledge about works executed. Lessons learned represent principles derived from multiple sources that increase the process of knowledge transfer and its application for new environments. Similarly, the phrase ‘lessons learned’ can be converted to ‘best practices’, which explains the widely accepted knowledge on what has evenly worked out, as a result of the implication of knowledge management. The approach of ‘best practices’ can be considered as a component of knowledge management. It generates opportunities to retain the knowledge originated in the organisation. ‘Best practices’ can be described as encouraging examples to boost future developments and projects. A ‘best practice’ is a critical success factor for the accomplishment of knowledge management in the same way as it is leadership, corporate culture and technology (Chen and Chen, 2006: 29).

Knowledge-sharing and creation require knowledge workers to spend much time and effort on top of their daily activities within the organisation. The involvement of users is a critical factor for a successful knowledge management system hosted in the special library. The most influential criterion and endeavour is to convince the top management of the company. Additionally, a requirement to keep the system current and vivid is to persuade and motivate people to create and submit new knowledge assets into the system. It is very important for the library to stimulate collaboration and to organise knowledge semantically and effectively. Knowledge contribution results in maintaining and nurturing the knowledge management system for the benefit of the parent organisation. Otherwise, there is a danger that the system fails (Razmerita et al., 2009: 1032).

The result of a knowledge management project in the special library is the introduction of a system that meets the requirements of the stakeholders. Feedback from employees confirms that the concept is valuable. It gives rise to further development and expansion of the system. The feedback generated from surveys, questionnaires, training sessions and face-to-face communications can be used to promote and encourage better knowledge management practices. In particular, it evokes the transfer, application and reuse of knowledge to create new knowledge in a cyclical process. Approaches that are library-based instead of user-focused will be increasingly irrelevant. Knowledge must be renewed and expanded in the knowledge management system in order to prevent it from becoming stagnant.

Benefits for the organisation

Organisational benefits of knowledge management initiatives have become an important issue of concern for knowledge management practitioners. Practitioners need to ensure that the strategies for knowledge management have contributed to the organisation’s improvement (Kim, 2006: 2). The measurement of the knowledge management performance is considered important both for the evaluation of the system and for its contribution to the successful progress of the organisation, although it is an intangible value. As wisely stated by Rowley (2003: 437), knowledge management is both integral and integrated into effective organisations and its success depends on the contribution of members of the knowledge management community because knowledge management may involve everyone in an organisation. The general goal of knowledge management is to improve the efficiency, effectiveness and sustainability of any enterprise. Organisations are making decisions to implement a knowledge management system with the assumption that there will be an increase in their effectiveness, efficiency and competitiveness (Montequín et al., 2006: 527).

A knowledge management system characterises the beginning of an innovation wave that penetrates the organisation. It is considered as a means to solve business problems that mitigate inefficiencies and improve the innovative orientation of a company. A knowledge management system housed in the special library benefits the organisation. Inter alia, the knowledge management system contains ingredients the special library undoubtedly is responsible for, such as tracking reference enquiries and replies; enrichment of databases and exploitation of the online catalogue; technical support solutions; FAQs created by the daily work at the library; Yellow Pages of the organisation; favourite resources derived from the analysis of usage of electronic resources. The content of the knowledge management centre is an institutional repository itself that contains valuable resources and knowledge pertaining to and created by the parent institution. Institutional repositories are commonly established pools of knowledge and information in universities containing all scholar research derived from the academic institution.

The knowledge management centre leads to improved business performance. Managers’ qualities and values such as accountability, transparency and enthusiasm in supporting new ideas are success factors for the new project. With courageous executives leading the way, the resulting catharsis can be both dramatic and incredibly energising, leading to the revitalisation for learning and innovation in the company (Rivinus, 2010: 38).

As stated in Chapter 2, the decision to implement a knowledge management system in an organisation – an institution, a company or a firm – is beneficial for many reasons (OECD, 2003: 19; Parker et al., 2005: 180):

 It exploits the knowledge that already exists within the organisation; it improves corporate memory and knowledge-sharing and it evaluates competencies.

 It increases opportunities for innovation and encourages the free flow of ideas.

 It transforms the stock of knowledge into a valuable source.

 It is an essential ingredient for the success of the company.

 It leads to greater customer satisfaction, boosts revenues and enhances the value of existing products by getting products and services faster to the market.

 It facilitates better, more informed decision-making.

 It streamlines operations and reduces costs by eliminating redundant and unnecessary processes and by making better use of employees’ time.

 It values employees’ knowledge by recognising their contribution and by rewarding them.

In the end, ‘putting knowledge management to work’ – to paraphrase the Special Libraries Association value statement ‘putting knowledge to work’ – is the utmost goal of the entire effort.

The content included in the project is a valuable resource of information for the smooth operation of the company. In addition to the benefits it brings to the whole company, the knowledge management system is useful for new employees who are allowed access to the knowledge they need in order to become oriented to the corporate culture. Having a mechanism to share relevant documents that facilitate their work and save time and money is enormously advantageous for current employees. Department heads can post announcements to keep their staff aware of all news. For organisational members who are geographically dispersed the knowledge management centre provides a way for the members to keep in touch and feel part of the community and not isolated. The parent organisation should encourage knowledge-sharing and adopt the knowledge management at senior management level. The importance of support by the parent organisation is essential for the success of the knowledge management centre.

The library operates as an informal training centre because it gathers knowledge and contributes to the professional development of employees by sharing already possessed knowledge. Informal learning is taking place through communities of learning, seminars and social networking opportunities. Among the components of a knowledge management system are communities of practice and social networking tools. The informal learning is costless for the company as compared with formal training for the professional development of employees. Given the difficult economic climate many companies come across, the firm saves money by establishing a knowledge management system at the special library.

In a perfect knowledge management system, all knowledge is non-rival and it should only be produced once (Van Zyl, 2009: 911). The goal and purpose of a knowledge management system is to exploit and make full use of the already existing knowledge in order to enhance the status of the organisation. Hence, the driving force for a company is the necessity to survive in a highly competitive business world. The purpose is to avoid duplication in efforts and money and any additional resources should increase their value and accuracy. A perfect knowledge management system breaks down hierarchies. The project is based on the knowledge of the employees regardless of their hierarchical position in the organisation. The value of knowledge is of great importance and the ultimate purpose is sharing knowledge. Knowledge is acquired and possessed but also communicated potentially by each employee of the organisation. Consequently, the knowledge management project overcomes the walls of hierarchies and the strict organisational structures and reveals the merits of knowledgesharing.

The equal approach to knowledge-sharing is useful for the entire organisation. A knowledge management system opens knowledge opportunities to all community members that desire to participate in the system. In my judgement, the accessibility to knowledge is helpful for both the individuals and the company and it is worth bypassing formal structures. Often formal structures are slow and inefficient for the development of the organisation. A good result of knowledge management is that a company retains the knowledge it has acquired in the knowledge management system, even if the knowledge owner – the employee – has moved on.

All healthy organisations generate and use knowledge. They absorb information, turn it to knowledge and take action based on it, in combination with their experiences. Knowledge generation is the process of acquiring knowledge in an organisation and developing it within its boundaries. Knowledge generation is a way to achieve business success (Davenport and Prusak, 1998: 52). A knowledge management system that contains searchable information on people’s interests, studies and projects can be attested as a valuable pool of knowledge for the executives of the firm to locate the pertinent person to talk to. The successful use of the knowledge management system by executives of the firm relies on their capabilities to exploit it to facilitate better decision-making and moreover to increase profits and reduce costs. As Larry Prusak describes in an interview (2010: 13), due to lack of time a company’s manager prefers to search the knowledge base, locate the individual who deals with a topic in question and talk to them, rather than read the research documents of the individual. For a busy manager it is more convenient to get assistance in the decision-making process, instead of trying to reinvent the wheel on their own. This is a very practical and valuable application that demonstrates the benefits of a knowledge management system.

A knowledge management project improves access to knowledge. It is a multi- and interdisciplinary research issue across the organisation. It improves the corporate culture and environment of the organisation because it directs people to behave effectively in ways such as the following (Davenport and Prusak, 1998: 153–61):

 The organisation will obtain a positive orientation to knowledge and will overcome obstacles in sharing knowledge.

 The organisation will take advantage of the technological infrastructure that is used in the knowledge management project.

 A consequence of the technological developments is that the self-esteem of employees and growth in their productivity are raised, because people are involved in new roles and learn new ways to work and communicate with peers.

 Although an expensive project, knowledge management contributes to the economic advantages of the organisation.

 Employees learn to behave in an open-minded environment.

 The motivation factors in creating, sharing and using knowledge are critical. In that way, employees are encouraged to contribute to the project. A motivation activity is probably reflected in compensation, rewards, prizes, tokens, etc.

 Knowledge is transferred through multiple channels, including exchange of knowledge in a discussion forum, face-to-face meetings and knowledge repositories.

 Building trust structures is an essential step for the success of the project.

 A human network is created with benefits for both the individuals and the organisation.

Benefits for the special library

The involvement of information professionals in the knowledge management project can lead to a higher profile for them when the project succeeds and is widely spread in the organisation (Loughridge, 1999: 251). A special library as a knowledge management centre resembles the ancient Athenian agora. It is a virtual agora. It is the iconic assembly place to foster scientific, professional and social discussions and exchange opinions, aspects and perspectives. It is the appropriate place to combine access to the collection of the library in any format but also to be the centre of excellence that accumulates the wisdom and knowledge of the entire organisation. As physical places, libraries are open and democratic forums to cultivate the exchange of ideas and to breed knowledge. They are the places to generate ideas by consulting the valuable library resources. Consequently, they are the cradles to generate and capture knowledge. The acquired knowledge can be shared and expanded. It contributes to the growth of the company or the parent institution. Special libraries as knowledge management centres expand their services and provide a vital source of wisdom for their parent organisation. As a result, the library ensures its continued viability in the ever-changing environment of the business they serve.

Libraries and particularly special libraries cannot be left as discrete units in the organisation simply serving it, but they thrive to participate in it and contribute to the decision-making and its strategy-formulation activities. Consequently, the role of information professionals or special librarians is likely to become more complex and demanding. Thus, information professionals as service-oriented staff should be seen as value-oriented professionals (Loughridge, 1999: 251). But the role of special librarians or information professionals and knowledge managers is the role of knowledge leaders, based on their knowledge expertise and their willingness to assume a knowledge leadership role in the entire organisation (St Clair and Stanley, 2008: 41).

With the expansion of technology and information overload, there is a danger that libraries – special libraries included – are being left behind. It is as though librarians cannot get rid of the obsolete conceptual model that the library is a warehouse of books. Although it is true, libraries still have print collections of books and journals and their clients make daily use of them. On top of that, libraries possess all modern electronic and technologically savvy tools and facilitate their users in their research. At the same time, libraries accumulate the collective wisdom of the company’s employees. Therefore, they will remain hybrid libraries for years to come. They also become social libraries because they combine traditional library functions with collections of content and vetted information as well as the social knowledge network of the community.

The special library as the knowledge management centre of the company must embrace the administration of knowledge. It is a necessity for its organisation to vet the knowledge generated within its boundaries. Furthermore, the corporate library must seize the opportunity and the initiative to take a leadership role in managing knowledge. The adoption of knowledge management systems in special libraries contributes to improve the qualifications and the role of information professionals within the company. Their involvement in knowledge management efforts updates both the library’s and the librarians’ status and adds value to their professional growth. By managing the knowledge management centre, the special library establishes its place at the centre of collective wisdom of the organisation. It reaches out to individuals, collects, selects, manages, diffuses, distributes and motivates the reusing of knowledge among knowledge workers. In doing so, libraries reinvent themselves and bring greater benefits to their organisations. Librarians become strategic partners in the organisation and implement the knowledge management plan. They can assist top management to obtain veracity of the information and knowledge existing in the knowledge management system. However, to execute this difficult and challenging task, libraries have to invite other players on stage who assist to build, maintain, manage and keep the knowledge management system current and sustainable.

Generally speaking, library science gains a lot by applying knowledge management methods and technologies. To a large extent, knowledge management definitely increases the operational efficiency of the library, enhances the services offered and benefits library users (Wen, 2005: 5). It is important to remember that library professionals have already possessed expertise in transferring internally produced information from users to information systems (Perez, 1999: 78). As Pradt Lougee 2007: 327) emphasises, the library obtains a more intuitive role, which is different from its traditional role of a steward of collections. The library is the catalyst for an interdisciplinary community. It ‘is called on to comprehend and engage the needs of a community, knitting together content, technology, tools and people’. This role encompasses a social dimension and has the potential to motivate change within a community. It is absolutely true for the role of a special library that handles a knowledge management project.

The special library becomes the agent of change in the organisation. It introduces an innovative and new model of management. If its management approves the knowledge management centre, the library introduces the model of collaboration with other stakeholders within, but also outside the organisation. The library functions as part of the overall process of implementing activities within the frames of the organisation. Nobody can declare that this is an easy activity. It requires much effort to persuade all stakeholders about the necessity and multiple benefits of the innovative project – that is, the knowledge management centre. However, it is worth to insist, push and try. It needs time for the organisation to understand, absorb and adopt the new structure. From the library’s side, the knowledge management team ought to believe in the success of the project, to show enthusiasm but also to rely on their particular skills and competencies in order to align the organisation to embrace the innovative services. The library surmounts its traditional operations within the organisation. The library facilitates interactions among the creators of knowledge, the reusers of existing knowledge, the librarians, the users of resources, the management of the organisation in various levels, the customers and the information technology teams. The special library becomes a useful collaborator and an indispensable part of the organisation.

The library becomes visible and provides evidence of its capabilities to organise difficult projects. It transforms into an attractive place to visit physically or virtually. Simultaneously, its reputation is raised as its responsibilities to undertake a knowledge management project are augmented. Librarians as information mediators or knowledge brokers are the appropriate individuals who understand how to maintain synergies between traditional and new information practices and to facilitate knowledgesharing. The human element is the most important component in the success of a knowledge management project. To that extent, people are placed at the centre of the project. The most important benefit for the library as the knowledge management centre is that it wins a leadership role and demonstrates the value of its services. It is a return on investment for the library to prove that it is capable of exploiting the resources purchased in the most advantageous way for the organisation (Trudell, 2006: 30).

By meeting users’ needs with the knowledge management project the library will foster relationships between itself and the parent organisation. Through the knowledge management centre the library makes partnerships and fosters relationships among employees. The personal interactions to exchange knowledge and generate ideas strengthen personnel relationships. Face-to-face interactions are also a basic means of communication. With personal interactions, new knowledge is revealed and further exploited. The company will acquire knowledge that will assist in the innovation and improvement of services. This project fosters the knowledge-sharing atmosphere. It further brings employee satisfaction and loyalty. Now it is time for special libraries to reposition themselves to centre stage of the knowledge management system (Lee, 2005: 8).

Evaluation of the project

Given the increasing role of knowledge management in upgrading business competition, the interest of managers in accepting, measuring and evaluating knowledge management performance and discussing its benefits is not surprising. Knowledge management is being accepted because it is widely dispersed that knowledge circulates in the organisation, creating knowledge assets and influencing the performance of the organisation (Chen and Chen, 2006: 17).

The success of the knowledge management centre relies on its usage. As with all projects and strategies, the knowledge management project has to be revisited, monitored and evaluated on an ongoing basis to make sure that it remains current and relevant to the institution’s needs. The growth of the resources attached to the project is a successful attribute for the system. Growth in the volume of knowledge content and usage is a performance factor to evaluate the success of the project. Changes in corporate culture provide evidence that the employees have embraced the project and are eager to change their attitudes. It is an exciting feeling that the project belongs to all members of the organisation and that it is an initiative not only of an individual but of the whole organisation as a result of teamwork. Upon embracing the centre, the staff will become familiar and comfortable with the concepts of knowledge-sharing and knowledge management. The special library plays an important role to promote the project throughout the organisation. It is a success factor, if the library motivates the organisation’s members to become contributors with their knowledge or knowledge-sharers for the knowledge management centre.

The knowledge management centre is a new and pioneering project for the organisation. Thus, it must be assessed in order to measure its success or failure. Effective evaluation is crucial for the future improvement of the system. Users’ participation in the evaluation process will promote its operation. Due to the fact that knowledge and its components such as knowledge-sharing, communities of practice and organisational learning are intangible features, it is not easy to evaluate a knowledge management programme. It may produce important outcomes for the company, but assessing the value of the services is rather difficult to calculate.

Evaluation is a necessary action for the improvement of the infrastructure, quality, support and management of the centre. The evaluation elements include services, facilities, technology aid, management and digital resources. In particular, digital resources that derive from the special library include inter alia repository, knowledge navigation, multimedia resources and the digital library. With evaluation, the system will be assessed with regard to parameters such as user satisfaction, quality, usefulness, effectiveness and efficiency. Methods of the evaluation of the project can be a survey in the form of a questionnaire or an online survey, statistics, observations and interviews.

The knowledge management centre is a strong initiative that boosts the company. The success of the centre can be measured by the influence the company brings in customer satisfaction and in new product development. The knowledge management system is successful when members of the organisation make use of it. Timely and critical feedback is necessary if the knowledge management centre is to survive and thrive.

Feedback on the knowledge management centre can be measured by constructing a user survey and preparing research questions. The questions for the survey must be cautiously selected so that the survey is simple and straightforward. Using e-mail to invite people to fill in the questionnaire is an option, but probably not best. Another way is personal contact with users to complete the questionnaire on the spot and give explanations. It is acceptable that the questionnaire is also sent out electronically. In any case, the person who is invited to answer the questionnaire must be informed about its purpose and that it will not take more than 20 minutes of the person’s time.

The survey rates user satisfaction and, from analysis of the data gathered, new decisions can be taken for the improvement and development of the system. The outcome is that the knowledge management system is tailored to users’ needs in an efficient and effective manner. Knowledge must be renewed and expanded to prevent it from becoming stagnant. A negative consequence of stagnation is the lack of usage and input by members of the organisation.

Listening to employees’ needs, conducting interviews and surveys and communicating are competitive advantages for the library. The purpose of an interview is to collect data and useful information for the implementation of the system. The interview could include such topics as (Thomas et al., 2001: 334):

 methods used for knowledge-gathering and creation of knowledge;

 methods used for knowledge dissemination; and

 processes used to determine how information is applied to work.

Interviews, surveys and questionnaires are necessary evaluation tools for the performance measurement of the knowledge management centre. Evaluation tools augment the library’s visibility. They are effective marketing devices and promotional activities.

The general types of knowledge management performance measurements include (S.A. Teruya, 2004, quoted in Kim, 2006: 2):

1. Internal measurement: evaluates the degree of implementation of knowledge management strategies. The evaluation is possible by using surveys, interviews and satisfaction ratings.

2. External measurement: includes numerical or financial analyses, such as return on investment and benefits incurred to the organisation by the implementation of knowledge management strategies.

3. Inferred value measurement: is based on speculation and often collects anecdotal benefits.

In particular, with the return-on-investment measurement method the resources invested in knowledge management activities are calculated and the financial performance of the initiatives are assessed. As we made clear elsewhere, knowledge management initiatives are based on intangible values and it is not easy to discern the return on investment with quantitative measures. For example, the return on investment for a senior manager who used the knowledge management system to take the most cost-effective decision for the profit of the organisation is to estimate how much time was saved during the research process, as well as the relevant cost and financial benefits that derived from the right decision being taken. As a result, this estimation helps executives to determine whether the investments allocated in knowledge management practices have created value for the firm.

Another method that could apply to evaluate knowledge management performance is the balanced scorecard that was developed by Kaplan and Norton (1992: 71–9). The balanced scorecard is a ‘set of measures that gives top managers a fast but comprehensive view of the business’. This method combines a balanced view of financial measures that express the results of actions already taken with operational measures. Financial measures are complemented by operational measures that include customer satisfaction, internal processes, and innovation and improvement activities of the organisation as drivers of future financial performance. Indeed, the balanced scorecard allows managers to look at their company from four significant perspectives:

 customer perspective;

 internal perspective;

 innovation and learning perspective; and

 financial perspective.

The balanced scorecard performance measurement method puts strategy and vision in the centre. It assumes that the company’s employees will adopt behaviours and take actions that are necessary to achieve the company’s goals. This method assures senior managers that improvement in one part of the organisation is not the result of sacrificing another aspect of the firm. As mentioned above, the third perspective of the balanced scorecard is innovation and learning. A knowledge management system is an innovative project per se, so that the balanced scorecard method could be implemented for evaluating its performance.

Some generic measures of the performance of knowledge management include the amount of codification of tacit knowledge, the importance of the repository created by codified knowledge, the usage of the repository items for the growth of the organisation, the currency of the repository, the level of collaborations in the knowledge management system, the new products and services developed as a result of exploiting the system and the decisions made by using the content of the system. Although return on investment and the balanced scorecard are evaluation methods and despite the wide implementation of knowledge management in companies, there is no standardised framework for measuring knowledge management performance within organisations yet (Kim, 2006: 6–7).

We have emphasised that knowledge is an intangible value. Consequently, it is assumed that knowledge management may be immeasurable. To find measurable means, the project can be measured more with qualitative performance measures, such as teamwork, learning and communication processes rather than with financial indexes and quantitative techniques. Variables of a knowledge management performance measurement, such as frequency of employee logins to the knowledge base, times an employee allocates content while searching the knowledge base, times each employee submits a proposal as a result of using the system, topics placed in the discussion board of the knowledge management system, new ideas created by reusing existing knowledge, new products emerged by exploiting new knowledge, as well as number and quality of communities of practice are regarded as quantitative data. Instead, variables such as level of customer satisfaction, job satisfaction levels and impact of knowledge management activities to the organisational performance are some of the qualitative data that are difficult to be quantified but only expressed as responses to surveys and questionnaires (Chen and Chen, 2006: 27). The evaluation of knowledge performance in an organisation is focused on leadership, on cultural, technological and process dimensions. At the other end of the spectrum, knowledge management performance evaluation is focused on strategy, management and implementation factors (Chen and Chen, 2006: 30).

A successful knowledge management project requires a combination of human, technical and economic skills. Balance is required between knowledge management and the day-to-day work performed in the organisation. Knowledge must always serve the broader aims of the organisation. The goal is not only acquiring and managing knowledge for its own sake but relating it with practice and actions in the organisation. A healthy tension between knowledge and action is the key to organisational success (Davenport and Prusak, 1998: 161, 178).

As Davenport et al. (1998: 50–4) hypothesise, the knowledge management project is a change management project. In previous chapters we mentioned that a knowledge management project can transform the corporate culture. Its success relies on the recognition it enjoys by the employees of the firm. The above authors mention the following success factors for an organisation that desires to build effective knowledge management projects:

1. Link to economic performance. A knowledge management project does not pay back the firm but the company earns indirect benefits, such as customer satisfaction or even providing phone support with fewer phone calls averted. The economic performance can be measured in the amount of knowledge used inside the company to make proposals, presentations and deliverables.

2. Technical and organisational infrastructure. Knowledge management projects are more likely to succeed when they use the existing technological infrastructure of the organisation. The organisational infrastructure is the establishment of a set of roles and group of people that already possess the skills to serve as resources for other projects.

3. Standard, flexible knowledge structure. When a company builds a knowledge repository, or a knowledge base, it must create some categories and key terms to enable access and use. If a repository has no structure, it is difficult to extract knowledge from it. A thesaurus is a search tool to connect the searcher’s terms with the categories in it.

4. Knowledge-friendly culture. One of the basic success factors for a knowledge management project is to cultivate the fertile soil to seed the initiative. People should be convinced to have a positive attitude to the project and to feel free to share their knowledge without having the fear that sharing knowledge can negatively affect their jobs. The project should fit the overall corporate culture. Incentives and rewards are necessary to get the people eager to share their knowledge with others. When a knowledge management project does not make any efforts to fit the corporate environment, it will not thrive, no matter the technology embedded and the knowledge content included.

5. Clear purpose and language. The terminology of the project should be clear enough for potential participants. The terms ‘knowledge’, ‘information’ and ‘organisational learning’ should be defined. Knowledge managers should also make clear the objectives of the project.

6. Change in motivational practices. It is a constant challenge for the knowledge manager and a critical success factor to motivate people to create, share and use knowledge. Each manager can invent various ways, such as commodities offers (e.g. ice creams and mouse pads).

7. Multiple channels for knowledge transfer. Knowledge transfer can be addressed through various channels. Getting contributors face-to-face is a success factor. In that way they can establish trust among them.

8. Senior management support. A critical factor for the success of the knowledge management project is to get the support of the upper management. Management support is expressed by funding the project and its resources and by clarifying the types of knowledge that are important to the company.

Having a knowledge-oriented culture, creating an organisational infrastructure, finding effective motivational tools and developing senior management support appear to be the most important success factors.

Knowledge management systems are designed to make better use of knowledge created and used within the boundaries of the organisation. During the life cycle of knowledge creation, storage, retrieval, transfer and application, much knowledge is generated. This knowledge must be maintained and kept up to date; otherwise there is a knowledge overload. Here knowledge appraisal emerges. ‘Knowledge appraisal is made up of the organizational and individual level processes by which a firm’s knowledge (tacit and explicit) is evaluated within each step of the knowledge cycle’ (Rasmussen and Haggerty, 2008: 18–20). With the practice of knowledge appraisal, users’ interaction with the knowledge management system is evaluated. The appraisal practice examines tacit and explicit knowledge, evaluates it and decides if the knowledge created should be reused, codified, kept active, archived or simply destroyed. Knowledge appraisal as a research method of evaluating knowledge management systems links users’ experiences with the system to decide what should be maintained and what should be discarded.

Measuring a knowledge management centre is complex because it involves the human factor that should be managed. Unlike data, knowledge is invisible because it is created in human brains and can be articulated only when people are persuaded to create, reveal, share and use it. Because the management of the human element in knowledge is difficult, motivational factors for creating, sharing and using knowledge are important. Knowledge is a critical factor to the success of the project (Davenport et al., 1998: 56).

Promotion and marketing of the knowledge management centre

Promoting services and expertise are key factors for the survival of any innovative product. Marketing is essential to attract users and refers to topics such as:

 advertising the project on relevant websites and, if decided, in newspapers and journals with press releases;

 taking part in national and international promotions;

 publishing leaflets;

 posting advertising banners to finance the web portal of the knowledge management centre.

Promotion of the new services and the new product is critical for its success. With marketing activities, the centre is dispersed throughout the organisation. It can be carried out by e-mail shots, word of mouth, water-cooler and lift conversations as well as formally with seminars, invitations to presentations. Spreading the word by using diverse media and channels is important to promote and disseminate the value of the system.

Informal seminars, brownbag sessions, lessons learned and best practices should be scheduled at regular intervals to create a favourable environment for users. The library as the knowledge management centre must cultivate partnerships with domain experts throughout the organisation. They will contribute by sharing and disseminating accurate and useful knowledge to the organisation.

Things to consider

The establishment of a knowledge management centre is not only a ground-breaking and radical project for the organisation, but also a paradigm of teamwork. It is the result of team effort to bring a knowledge management system into existence. This leads to a significant prerequisite. One person, namely the chief knowledge officer, does not possess all of the knowledge. Under their leadership, it is a team that manages the knowledge management centre. It consists of representatives mainly from the library and from the human resource, information technology, internal auditing, finance and operations departments, who are responsible for handling, creating and disseminating information and knowledge. That is because the knowledge repository is an aggregation and combination of vetted information in the form of documents, papers, books, images and social communications and networking from communities of practice and the implementation of Web 2.0 technologies, namely social media. The proper integration and management of vetted information (repository) and wisdom of the community (knowledge) fulfils the purpose of the knowledge management centre. Knowledge is present in various areas in the organisation. The knowledge management centre brings to one place all efficient, rich and relevant knowledge that organisations use to fluently solve problems, to meet challenges and for top executives to make the best business decisions.

A knowledge management centre must be a convenient, just-in-time location, a user-friendly site, updated to keep people’s interest and to be responsive to people’s needs. It should be populated with information by designated people responsible for maintaining the knowledge management centre and identifying appropriate resources (Hanley, 2009: 17).

The majority of the effort in a knowledge management initiative is focused on the processes for creating, sharing and using knowledge (Oxbrow and Abell, 2002: 25). The process of building a knowledge-sharing plan includes the following (Trudell, 2006: 28):

 It is necessary to identify, analyse and measure business needs. A requirement is to understand the work of different departments and the way the work affects the well-being and smooth running of the organisation. The library as the information centre of the organisation responds to several internal enquires that help it highlight the business needs. Thus it becomes the contact centre that matches different departments and becomes aware of business needs.

 Next is to identify knowledge-sharing activities that have an impact on business needs. One of those activities is the creation of communities of practice comprising people that benefit from each other’s expertise and encourage interaction among individuals. Transferring knowledge means that people transmit to others the knowledge they have learned, but it also means disseminating learning and expertise to reuse knowledge.

 After recognising different knowledge-sharing activities, there is a need to select tools for the support of the knowledge management centre. These include: web conferencing, e-rooms, intranets, document management system, taxonomies, internal blogs, Twitter, wikis and other Web 2.0 tools. The implementing tools follow the declaration of the business needs.

 As mentioned before, the starting point is a small project. The project will be evaluated. If it has successful results, it can be used as a model for the whole project.

The knowledge management centre should create a friendly corporate environment. It is very important to mention, though, that the system is based on people. It is a novel project and causes many changes in the organisation. It is hard work to change mindsets and persuade people to share knowledge. People usually think that knowledge belongs only to them and are not keen to share it with others. It is efficient for the process of the project to stimulate knowledge-sharing. Before starting it is essential to build an environment where employees are expected to share rather than hoard information (Hanley, 2009: 17). Resistance to change is one of the issues for management. Among the decisive factors to be considered in the planning process is resistance to change and ways to mitigate it. The corporate culture and personal attitudes and incentives have to be changed for the advancement of the centre. This prerequisite might cause complaints because people often refuse to easily accept changes. It is inevitable that people will feel uncomfortable when faced with new things. But the protagonists of the project, e.g. the knowledge management team of the knowledge management centre, should be prepared to deal with oppositions. Resistance to change has to be leveraged and gradually absorbed in the organisation for the project to be successful.

The members of the organisation should feel an integral part of the knowledge management system. They must embrace the project and be convinced of its value. Only when they are persuaded of its value can they really contribute and share their knowledge with the system. It must become part of everyone’s job. There are bonuses, incentives and reward schemes for knowledge sharers. For example, mentioning frequent contributors to the system is an ethical reward for the knowledge sharer. Companies have to work hard to achieve the culture of support, trust and reciprocity. Knowledge management systems require effective management and organisational support. Knowledge included in a knowledge management system is accessed and shared across the organisation or transcends national boundaries. The development of new products and services increasingly requires the integration of knowledge from multiple disciplines (OECD, 2003: 41, 45).

The organisation may not realise how successful the knowledge management system will be until it builds it, motivates employees to contribute and figures out how the whole organisation responds. The most essential element is to get started with something, even with a pilot project (Davenport and Prusak, 1998: 143). Following the pilot phase, the next steps are planned and executed based on the experience of previous stages.

The size of a firm is an important factor in the decision-making process of introducing a knowledge management system. For a small firm of 10–20 people, the realisation of a knowledge management system is a luxury. The company has neither the resources nor the personnel to devote to a knowledge project. On the contrary, the introduction of a knowledge management centre in a larger company is acceptable as it adds value to it. The firm accumulates further knowledge; it expands and exploits existing knowledge.

Things to avoid

Davenport and Prusak (1998: 173) suggest remembering the ‘33⅓ rule’: ‘if you are spending more than a third of your time, effort and money on technology, you are neglecting the other factors, such as content, organizational culture and motivational approaches that are ingredients of the knowledge management project.’ Excessive focus on technology is the most common pitfall of knowledge management. Therefore, a point to avoid is to give priority to technologies. Technology cannot deal with tacit knowledge and should not drive any knowledge strategy. It has an essential but supportive role to play. It is a communication medium and should be considered as such (OECD, 2003: 48). Particularly, as regards the application of Web 2.0 tools, a potential drawback is that they raise privacy concerns as potential barriers inside a company. This shortcoming cannot become the reason for not introducing technological tools in an organisation because there are always solutions to overcome these obstacles.

It is a mistake to include a telephone directory, a procedures manual or a personnel manual in the system and name it a knowledge management system. These documents do not include knowledge and cannot create knowledge. They are information tools.

The knowledge management team and particularly the knowledge manager should not forget to provide incentives for the contributors to the knowledge management system. Incentives strengthen competition, encourage participation and evoke enthusiasm.

The people involved in the system cannot take knowledge management as an automatically self-growing system. They have to spend time and effort to argue about the worth of knowledge throughout the organisation. Although all members of the organisation are potential users, at the same time they are knowledge contributors. Despite this, only the people that build the system are deemed as knowledge managers, who have the responsibility to run it. They comprise the knowledge management core team consisting of librarians, IT personnel and human resources staff. Support by the upper management is not guaranteed until the knowledge management team pursues it. It is important to assure the support of the company regardless of the individual that holds the CEO position. Moreover, it is indispensable that the support remains even after the person that gave their consensus to begin the knowledge management project leaves the organisation.


As happens with all projects and programmes, measures and precautions should be taken as regards the maintenance of the knowledge management centre. Its sustainability should be ascertained in order to remain vivid and dynamic. It should be well understood that it is not a static project. In line with the adage that knowledge management is not a fad but is here to stay, the knowledge management centre will remain a brilliant nucleus of the organisation. In order to remain vivid, it requires continuous support, input and contributions by the knowledge management stakeholders, as well as wide acceptance by the organisation’s employees. Above all, though, the endorsement and support of the executives encourage individuals to adopt the new system.

The extremely important factors that are necessary for the successful development of knowledge management are to continue creating, converting, circulating, reusing and implementing knowledge management processes (Chen and Chen, 2006: 33). Maintenance of the knowledge management centre means the ability to continually change and gain new insights that will foster and cultivate the existence of the knowledge management system.

The way forward

Oxbrow and Abell (2002: 29) expressed the truth when they said: ‘life after KM – forget it. Life is KM.’ Knowledge management is here to stay. In fact, it is not a fad but a reality. Knowledge management is one of the pivotal themes that has changed the way organisations work. The impact it has on people throughout the organisation is remarkable. In order to be established within an organisation, knowledge management harnesses – or contributes to the modification of – the corporate culture and language to create innovative approaches to the management of the organisation. The same authors (2002: 25–6) very delicately distinguish between the European approach to knowledge management and the approach in the USA. Knowledge management in the US has largely been IT-driven. Conversely, in Europe there is evidence that the less IT-oriented approach is likely to endure and change attitudes. They also suggest that ‘Europe “does” people better than it “does” technology’. As it is understood, knowledge management is about people. However, it does requires an investment in software, information technology and the labour force. We emphasise that the prevailing element in knowledge management is people. However, we cannot overestimate the importance of technology as an enabler of the knowledge management centre.

In the present economic downturn, knowledge management can be regarded as a paradigm to make crisis an opportunity. As organisations face financial difficulties, their executives might think of using the internal knowledge of the knowledge workers, namely the brains of the organisation’s employees, to think creatively and be innovative. Thus the downturn can stimulate creativity. Recession is an opportunity for business to reconfigure its goals, organisation, processes and competencies (Oxbrow and Abell, 2002: 26). New insights and approaches to tasks and in decision-making processes can arise. The turbulent financial situation stimulates the firm to build and grow its knowledge base. Then, when the rough sea of difficulties calms, the organisation will find itself in an advantageous position with a new ‘knowledge wave’ that creates new products and locates new markets and customers. Therefore, it is advisable to think of knowledge management as an opportunity in difficult situations. Therefore, ‘life after KM – forget it. Life is KM,’ as Oxbrow and Abell (2002: 29) believe. Certainly, we endorse this statement.

For the special library to succeed in implementing a knowledge management system, it will need strong leadership and vision from the top administration, which can in turn influence the organisation’s knowledge-sharing efforts in a positive way. In the twenty-first century, libraries armed with professional knowledge and experiences should be in the driver’s seat and not sitting in the back of the train. In the process of knowledge creation, libraries should strive to be an enabler and facilitator by mobilising all its efforts and resources (Lee, 2005: 7). Nowadays, the responsibilities of special libraries are more demanding than before in the boundaries of the parent organisation. They will live or perish. They have to change behaviours and attitudes to remain in the driver’s seat. They have to drive developments instead of being left behind. They have a unique opportunity to capture and organise the company’s knowledge.

From their nature and history, libraries foster collaboration and open their doors to their clients and to new trends. In severe economic and social times, libraries are the last resort of people that need to get information, to consult resources or simply to read and borrow a book when they cannot afford to buy it, to communicate with their relatives using the library network and facilities as regards public libraries. Information centres can remain in the centre of interest of the communities they serve. In the same way, special libraries have all the advantages to become the knowledge management centre of the parent organisation. When times are tough and people are called upon to tighten their belts, libraries have a world of opportunity ahead of them. They can take a test of leadership and be strategic in proving that they can be the reliable trusted parties of the parent institution to accumulate all information and knowledge resources and administer them for the benefit of the organisation. It is an ideal prospect for information professionals to aim at staying closer to the top management of the business and become involved in its core tasks. But special libraries have to provide evidence of the capabilities of their professional staff to contribute in changing business conditions and to introduce novelties that advance the status of the organisation. A knowledge management centre is a highly innovative paradigm that adds value to the organisation.

Many specialists in knowledge management consider that Web 2.0 tools, social networking tools, can be the future of knowledge management systems. Razmerita et al. (2009: 1026) emphasise that in the second phase of knowledge management, companies focus on the social and collaborative dimension of Web 2.0 tools, including wikis and blogs, and try to exploit a much richer form of knowledge assets. The variety of Web 2.0 communication tools enables the introduction of new knowledge management models, also called KM 2.0 models. The advancement of web technologies and semantic technologies will enhance Web 2.0 tools and will improve the organising of tacit knowledge (Razmerita et al., 2009: 1026, 1034).

Librarians have a golden opportunity to market themselves and their services as innovative thinkers. They have to grasp this chance to shape and develop an innovative service. It is a great challenge for them to demonstrate their central role in the organisation. Therefore, both the professionals and the profession will attain greater esteem than now. They will break the stereotype of a librarian as a plain information provider. Knowledge management will be in our vocabulary and job description for many years to come. We librarians need to demonstrate managerial, communication, financial, marketing and political expertise (Edgar, 1999: 126). In current times, when the role of libraries of various kinds is questioned, catching the opportunity to transform, particularly the special library, into a knowledge management centre will raise the library’s dignity and reputation and demonstrate its value within the organisation. The value of the knowledge management centre can break the boundaries of the organisation to penetrate all peer organisations and customers related to the company.

The future roles of libraries are associated both with the traditional role of collection stewardship and with understanding communities and framing collaboration models that bring together communities with similar scholarly interests. Libraries have a critical role to play in exercising control, in adding value and in being the catalyst of change. The latter encompasses the critical social role of the library that knits together content, technology, tools and people (Pradt Lougee, 2007: 327–9).

As Green (2008: 10) envisages, the next generation of knowledge management can be called the social knowledge network and the library environment can be called the social library. Green emphasises the changing role of librarians in special libraries and that the librarian is the backbone of the library who handles the vetted knowledge and the wisdom of the community within the boundaries of the organisation. The special library as the knowledge management centre of the organisation becomes the social library, which combines information, knowledge, the hybrid (print and electronic/digital) library and the community wisdom of the organisation members.

Case studies

Prominent international organisations have introduced intranets for internal use by their staff or extranets to be used by authorised users outside of the organisation. Nowadays, it is very common for prestigious organisations, consulting firms, associations, IT companies and others to create knowledge bases available on the Internet but with usage limited to their members, who are the password-holders. A few examples of international organisations that have established networks for their members containing valuable information and knowledge include: OLISnet is the extranet of the Organisation for Economic Cooperation and Development; eBIS forum is the extranet of the Bank for International Settlements; and DARWIN is the knowledge organisation system of the European Central Bank.

The knowledge centres gather information on several topics of interest to the internal and external participants of the system. Each individual is allowed access only to the particular part or group that contains information pertaining to their field of work and authorisation. The person can subscribe to the specific group and post a problem or a topic of common interest and introduce a debate among members of the group. The administrator keeps track of the flow of information. Communities of practice, blogs, postings, working groups and discussion forums are frequent paths to participate in a knowledge management system.

In this section we refer to a few case studies of knowledge management systems where the library’s involvement is evident. Some of them are concerned with central bank issues, which are included because the author of this book works in that sector.

Case study 1: Central Bank and Financial Institutions Librarians’ mailing list: example of a community of practice

In 2003 in the framework of a Central Banking Publications seminar, a group of central bank and financial institutions’ librarians, agreed to establish a mailing list aimed at forming a common communication tool and a forum to exchange experiences and ideas on library issues. It was not established as a strategic but as an operational tool intending to discuss practices relevant to central bank libraries at a global level. It can be characterised as an open online community of practice because it is not constrained by organisational boundaries. It has a boundary-crossing structure. It is mundane in nature and in context.

The mailing list is a kind of online community of practice and has operated without interruption since its creation. It functions as a voluntary forum and participation is not compulsory by the parent institutions. Organisational support is limited to the endorsement of the parent institution of the list. The first listowner administered the mailing list until March 2010. Thereafter, its successor took the leadership and monitoring role and it is the moderator of the mailing list. As regards the category of leadership (to follow the typology of Hara et al., 2009: 747–51), apart from the moderators, there are the active participants and the founding members. The active members are more visible than others in their contribution, but the founding members take action in topics such as testing new tools and transition to the new moderator.

As regards the degree of institutionalised formalism, it is an informal community of practice. It is a medium-sized community of practice as it potentially includes all central bank libraries and distinguished international financial authorities and organisations, such as the International Monetary Fund, the Organisation for Economic Cooperation and Development, the European Central Bank, the Asian Development Bank and the European Bank for Reconstruction and Development. Thus, it is geographically dispersed.

Concerning the members’ selection, subscription is open to all staff members of the participating libraries. Moreover, members are enrolled voluntarily. Access to the list is limited to members only. The topics discussed are relevant to the daily work of librarians. They share knowledge and experience but they also post queries for the problems they face during their course of work. The uninterrupted operation of the mailing list proves its sustainability and effectiveness among its members.

Case study 2: Knowledge-sharing approaches in the United Nations (UN)

An interesting and practical application of a knowledge management programme was presented by Linda Stoddart (2008: 1–7), Head of the Dag Hammarskjöld Library and Knowledge Sharing Centre and Chair of the UN Knowledge Sharing Task Force, during the 74th IFLA General Conference and Council at Quebec, Canada, in August 2008.

The positive circumstances that made possible the establishment of a knowledge management programme were the reform and organisational changes in the UN. As they were planning the new knowledge management programme, they formed a new office called the ‘Office of Information and Communications Technology’. The library itself is called the ‘Library and Knowledge Sharing Centre’ and holds a central presence across the organisation. Information professionals in the UN are taking on new roles as coaches and consultants to help their organisation manage information and knowledge. They prepare targeted information resources to support the functions of the organisation and work as networking facilitators among the knowledge workers of the UN.

The starting point of the new institutional reform and change was the redesign of ‘iSeek’, the UN’s intranet. The Dag Hammarskjöld Library and Knowledge Sharing Centre took responsibility for the management of the intranet. In that way the library developed a more prominent role in the management reform of the organisation. The intranet fosters a sense of community and encourages dialogue and transparency between management and staff worldwide. Senior management not only supported the development of the intranet, but also realised the importance of involving staff in the change process. This technological tool influenced the culture of the organisation towards a more collaborative environment. The senior management recognised the contribution of the development team and honoured them with the ‘UN 21 Award’ in 2008.

The intranet, iSeek, managed to bring together disparate parts of the organisation. The objectives of the intranet were in line with the objectives of the UN. Some of the goals include: to enable users to find what they need to know; to facilitate staff understanding on UN strategies and priorities; to help UN Information Centres around the world to better serve and operate effectively; to provide timely and online access to information and documents; to support change management through better dialogue; and to streamline processes to facilitate faster decision-making.

As part of the information and communications strategy of the UN, the knowledge management programme is set up to facilitate organisational innovation and change with knowledge-sharing activities. The programme helps locate relevant information and facilitates the analysis and synthesis of information and knowledge. It also encourages collaboration to enable change in the organisational culture. Among the objectives pertaining to the knowledge management programme are:

 the creation of an institutional knowledge repository;

 the transformation of the UN’s website into a knowledgesharing platform;

 the information management policies and standards of the Secretariat;

 the implementation of web-content management and document management systems; and

 the collaborative networks and enhancement of knowledgesharing activities.

During a forum that took place in 2008, the following suggestions were made on:

 knowledge collaboration: identify existing communities of practice and launch the use of wikis;

 knowledge creation: establish knowledge directories of what people know and what they do in the organisation; set up a directory of former UN officials to capture their knowledge; create a directory of knowledge management specialists; use stories to promote knowledge;

 knowledge application: evaluate knowledge transfer initiatives; encourage mentor relationships; provide a skills inventory; use social networking applications; determine effective ways for knowledge storage.

In their concern for the knowledge management programme to become effective, the initiative will have to demonstrate visible benefits for the entire staff and their working life. The programme will have to focus on concrete and tangible outputs, to encourage communication and to enhance collaboration for the sharing of expertise and ideas.

This case study is an eloquent, powerful, overt, credible and convincing example that the special library is capable of administering an organisation-wide system such as the knowledge management centre, here named the Knowledge Sharing Centre.

Case study 3: The knowledge management strategy at the Financial Services Authority

In his article, Ros Jones (2003: 475–87) describes the knowledge management strategy at the Financial Services Authority (FSA) in the UK over a period of 18 months. The FSA is an independent body that regulates the financial services industry in the UK and was established in 2001. In his case study, Jones presents the benefits arising from the implementation of a knowledge management strategy in the legal division, called General Counsel’s Division (GCD), of the FSA.

When the knowledge manager was asked to demonstrate the benefits of knowledge management strategy in the GCD of the FSA, she first conducted a preliminary knowledge management audit to understand the current position in GCD relating to information and management resources. The inventory was used to evaluate the knowledge available in the division, to discover strengths to be exploited and gaps to be filled. The knowledge audit was carried out by interviewing lawyers and support staff of the GCD as well as key individuals from support units such as the information centre (the library) and information services department (IT).

The report produced by the results of the inventory formed the baseline to measure the implementation of the knowledge management strategy. Recommendations to help resolve issues arising from the knowledge audit were drawn up. The recommendations were approved by the GCD’s heads of departments and managers. Given the approval, the knowledge manager proceeded to form the knowledge management strategy. It was drawn up to include knowledge management activities for implementation along six action lines: coordination, knowledge base, knowledge-sharing culture, current awareness, IT and training, and external relations. The knowledge management activities set out in the knowledge management strategy aim to support and facilitate the process. The aim of the knowledge management strategy was defined, too.

One of the requirements of the knowledge management strategy was the provision to be revisited, monitored and evaluated on an ongoing basis to ensure that it remains relevant to the needs of the GCD. As it was planned, the purpose of this case study was to measure the benefits of the knowledge management at the FSA’s GCD. For that reason, it was necessary to apply a model. Applying methods based on the balanced scorecard (Kaplan and Norton’s balanced scorecard model is a flexible method of performance measurement: it translates a business unit’s mission and strategy into tangible objectives and measures, organised in four perspectives: financial, customers, internal business processes and learning and growth), a knowledge management benefits scorecard was constructed. It was based on the knowledge management activities or actions set out in the knowledge management strategy. To measure knowledge management, the knowledge manager used both qualitative and quantitative methods. While quantitative methods were applied to obtain numerical data, qualitative data were collected in the form of anecdotes and feedback gathered from meetings, e-mails and during casual conversation.

One year after the arrival of the knowledge manager, a survey was conducted to collect qualitative measures of the benefits of the knowledge management activities. The results of this survey were compared with the results of the interviews before the implementation of the knowledge management activities. An overall analysis of the results of the measurement presented a delay in implementing some of the knowledge management actions. In 18 months, full implementation of the knowledge management strategy had not been achieved. This was predominantly due to individuals’ resistance to change. This resistance to change appeared to be a major obstacle. The behavioural change required time and encouragement to adjust to new cultures. On the contrary, building good relations with pertinent individuals was an important element in the process of the knowledge management implementation.

As a conclusion to the above case study, it is worth mentioning that from the very beginning of the project the knowledge manager realised the significant partnership with the library in creating the knowledge management strategy for the FSA.

Case study 4: Knowledge management at the Oesterreichische Nationalbank (OeNB: Austrian Central Bank)

‘Knowledge is an active quality which can be optimised by a sound education, intellectual agility and well-targeted motivated measures.’ This sentence was written in the foreword of the first Intellectual Capital Report of the OeNB published in 2003. Very early the bank realised the importance of compiling an annual report that presents the OeNB’s stock of knowledge-based capital as well as internal and external knowledge flows. The knowledge base of the OeNB is built in four pillars:

1. The human capital comprises staff expertise and skills applied to business processes.

2. The structural capital refers to organisational and communication structures and to the technical infrastructure.

3. The relational capital includes ties with national and international customers and partners.

4. The innovation capital refers to resources with a clear, forward-looking orientation.

The above four categories of the knowledge base are interconnected. According to the report (2003: 9), ‘if OeNB staff members (human capital) prepare a joint position together with their counterparts at the European Central Bank (relational capital) using suitable technical systems (structural capital), they render a service to the OeNB while at the same time enlarging their knowledge base so they can build on it in the future.’

The knowledge base of the bank complies with the OeNB’s strategy. It has formulated four knowledge goals that focus on establishing and enhancing expertise and skills, structures and relationships that are necessary for the provision of the bank’s services. Those four knowledge-base goals are (Oesterreichische Nationalbank, 2003: 11; Oesterreichische Nationalbank, 2009: 58):

1. Competence through specialised knowledge. The OeNB’s staff must have highly specialised knowledge and must show top-level ability to perform well, a distinctive willingness to learn and high flexibility that is supported by targeted training and education measures.

2. Confidence through knowledge transfer. Since public confidence is the most important good for central banks, the OeNB keeps it at a high level by pursuing an active information policy. The aim is that the active transfer of knowledge shall increase public understanding of how a central bank functions and consequently it will contribute to ensuring public confidence. As a result, proactive dissemination of information is meant to foster public understanding.

3. Interdisciplinarity through internationality and cooperation. One of the goals of the OeNB is to keep the Austrian financial market stable. To achieve this goal the bank actively cooperates with its partners in the Eurosystem, with commercial banks, public authorities and scientific institutions.

4. Efficiency through modern management. The OeNB strives to constantly develop and improve its business processes and risk management. In order to achieve this efficiency, the bank further develops its know-how in business administration and uses innovative methods and techniques as well as a secure infrastructure.

The bank pays much attention to the staff’s know-how and experience as key factors to rendering first-rate services. To meet this goal, the OeNB must strive to increase all employees’ knowledge through continuing education and to make use of the existing intellectual capital at its disposal. Thus, the OeNB regards its employees and their knowledge among its most important assets. For that reason it considers training as an investment in the future. Moreover, it is of highly strategic importance to keep employees continually informed about the latest findings in their fields of specialisation, to improve their technical expertise and social skills. For that purpose, it offers training courses throughout the year for all positions and at all levels because targeted knowledge-building promotes the quality of services provided.

The specific challenges the OeNB faces require managers to perform efficient management. For that reason, highly specialised employees are offered the opportunity not only to pursue a classical career in management, but also to opt for a specialist career that concentrates on technical expertise and coordination tasks. The innovation capital of the bank comprises innovative projects geared to increase internal efficiency and custom-made IT applications. In that way, the OeNB acquires know-how, which in turn inspires new ideas. Due to the fact that innovative projects encompass changes, the bank places emphasis on all aspects of change management. By employing knowledge-based capital, the OeNB endeavours to create efficient, high-quality business processes and to provide a fully functional and powerful infrastructure, using professional support processes.

The fulfilment of the above clearly defined knowledgebase goals are constantly measured for their efficiency. The performance indicators measured, inter alia, include percentage of university graduates, gender management, flexible working arrangements, numbers and duration of training courses (knowledge acquisition), expenses for training and education per employee, number of IT applications, IT expenses per employee, online help desk queries, number of international meetings hosted by the OeNB, number of national bodies with OeNB representatives, number of lectures delivered by the bank’s staff, number of OeNB publications, number of papers published by OeNB staff in refereed and in specialist journals, number of press releases and press conferences, average intranet visits per day, page views of the OeNB’s website, number of research cooperation projects with external partners, number of research visits, number of conferences, workshops and seminars, staff resources utilised for innovative projects and staff suggestions for improvements (innovations).

The OeNB monitors fulfilment of those high standards by regularly analysing and continuously optimising its business processes. For example, in 2009 the OeNB conducted an internal review of its tasks and resources to ensure that it will stay as flexible as necessary to implement its services. In 2009 the bank introduced another innovation. It set up a communication team (Oesterreichische Nationalbank, 2009: 64) that was made up of representatives from various departments with responsibility to control both the internal flow of information and the OeNB’s external communication activities.

Therefore, the Intellectual Capital Report model shows that, from a methodological perspective, business processes are the intermediate step that leads to the provision of the bank’s services. Consequently, the report becomes one of the major tools of modern corporate governance within the OeNB, either as an independent report (2003–2008), or as part of the Annual Report of the Bank (2009). Either way, the OeNB counts on the targeted allocation of its knowledge-based – specifically intellectual – capital as well as on optimised processes and structures.


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