Organizational Development for Knowledge Management at Water ...

The Business Case for Knowledge Management
In the Drinking Water Utility Industry
A Mountain Quest Institute Report
Executive Summary
This paper addresses the question of how knowledge management can contribute to a
drinking water utility’s bottom line. After defining critical terms and suggesting several utility
outcome measures, it is proposed that all of the worker’s daily actions, taken together,
determine how well a utility performs. Worker competency, knowledge and motivation are
primary drivers that determine the effectiveness of their actions. The challenge for leadership is
to ensure workers have the requisite knowledge to make effective decisions and take actions
that result in the best utility performance. This is the role of Knowledge Management.
Knowledge Management is a set of ideas, principles and practices that make knowledge
available to decision-makers at every level of the organization, and help encourage workers to
learn, take the initiative and guide their actions to meet utility goals and objectives. Thus
leadership, through Knowledge Management implementation, creates a culture, structure and
technology that facilitate the worker’s capacity to create, share, leverage, and apply their
knowledge to maximize utility performance. By looking at their utility through a knowledge lens
and practicing Knowledge Management, leaders and managers can improve their organization’s
efficiency, effectiveness, product quality and sustainability. This is the bottom line of the
business case.
What is knowledge and Knowledge Management?
Knowledge can best be understood as the ability to take effective action. If an individual
understands a situation well enough so that he can take an action that will result in the expected
outcome, then he has knowledge of the situation. Knowledge involves understanding, insight,
experience, judgment and the ability to anticipate the results of actions. We can now see the
connection from knowledge to action to results to performance. Knowledge Management is the
name used to represent the ideas, principles and practices that leaders/managers take to get all
employees to have and use the best knowledge possible in their day to day work decisions and
actions. It also represents the processes and practices of workers as they apply and share their
knowledge in the workplace.
What are the performance measures?
In the utility business, performance measures include the following: efficiency—doing things
right; effectiveness—doing the right things; quality—providing the best products desired; and
sustainability—creating a utility that can withstand the surprises and shocks that occur over time
in the environment. Simply put, efficiency reduces cost, effectiveness produces the right
products and services, quality keeps customers happy, and sustainability keeps the utility
around for a long time. At any given time different utilities will put different emphasis on these
measures. However, they are all dependent on the actions of every employee every day.
What drives performance?
It is understood that the environment can create forces that may significantly challenge the
utilities capacity to respond. Nevertheless, their response is heavily dependent upon each
worker taking the best action, doing the right thing to further the utilities objectives. This is true
for the governing board members all the way to the newest employee, whatever their job
description. How well do they understand their job? Can they trace their work responsibilities to
the purpose and vision of the utility? Do they know the effect of their actions on the rest of the
utility? In brief, do they have the knowledge to make the best decisions and take the best action
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©2011 Water Research Foundation. ALL RIGHTS RESERVED.