Case Study: Knowledge Management Initiatives at the Reserve Bank

The nature of the work of the Reserve Bank was such that it required a range of specialist skill sets that were not readily available within New Zealand. This was mainly because there was a lack of a large pool of individuals with specialist skill sets, such as macroeconomics and banking supervision. In 1999, the Bank implemented its knowledge management (KM) initiatives. From the outset, involvement in the KM initiative came from all levels. The Bank's governor directly sponsored the initiative, and this top-level support was particularly helpful in communicating the importance of the initiative to all staff. A clear corporate vision (Kanter, Stein, & Jick, 1992; Nonaka & Takeuchi, 1995) and top-level support (Blackler, 1995; Nonaka & Konno, 1998) are widely acknowledged as fundamental to the development of a strong knowledge culture.

At the same time, staff from the library and records management area as well as other parts of the Bank came together to form an informal, grassroots network. Other critical components were identified as the trust of the organisation's staff and the presence of appropriate social norms and organisational culture, both of which were confirmed by the experience of the Bank. Communities of practice have an important role to play in sharing learning and knowledge across an organisation (DiBella & Nevis, 1998), as evidenced within the Bank, where this informal network-initiated brown-bag lunchtime sessions, where those interested in finding out more about KM and how it would work in the Bank could meet and discuss the various issues. This group also helped to identify the barriers that existed in terms of knowledge sharing.

Building a KM Framework/Strategy

The Bank had developed a vision and seen the formation of both the Knowledge Services Group and more informal KM-friendly networks. The Bank determined that the most logical starting point was to gain an understanding of KM, to investigate global best-practice thinking, and to identify a preferred development process or framework that would be most appropriate to the Bank. To enable this development, the Bank sought to develop its local framework with the help of an outside individual who could bring in best practices and knowledge in terms of what was happening in other parts of the world.

However, a critical concern for the Bank was the loss of control of ownership of the process. To maximise the potential of the appointment, the Bank secured the services of an individual through whom it could gain access to established networks and the individual's organisation.

By doing this, the Bank was able to harness significant information on what other organisations were doing about KM, and assessment of this information would assist the Bank to develop its own KM strategy. The aim of a strategic approach to KM is "to build, nurture, and fully exploit knowledge assets through systems, processes, and people and convert them into value as knowledge-based products and services" (Earl, 2001, p. 228). This was the Bank's objective. The Bank then undertook a 12-week program that effectively developed the framework into a workable strategy.

Strategy Development

Developing the Bank's KM strategy involved all areas of the organisation, and contained four main phases. As part of this work, an examination was made of the organisational culture, structure, and infrastructure to determine what changes would be needed. In the initial threeweek phase, the Knowledge Services Group worked with the external consultant to gather and review the KM data and best practices from around the world. One area of the strategy development that posed particular difficulty was the identification of specific knowledge that would have to be managed in each function. To overcome this difficulty, three separate categories were identified for classification purposes namely (i). structured data, (ii). unstructured and semi-structured information and (iii). experience/knowledge.

The three categories were also analysed in terms of their collection, storage, access, sharing, and use. This outcome of this process indicated that, as expected, the Bank was reasonably good at managing the structured information (data) in terms of sharing it and providing access to it. With unstructured or semi-structured information, the Bank considered it was good at its collection, but not so good at organising and storing it. The Bank also found that sharing of information within departments was far better than the sharing between departments. Armed with this knowledge, the Bank then carried out phase three of the program, which included a gap analysis that identified four threads namely (i). people to information, (ii). people to people, (iii). institutionalise knowledge and (iv). collaborative culture.

Activities in this area were focused on creating a collaborative culture to make the most of the resources that the Bank had, and a collaborative working environment in which sharing is active and deliberate. In general, the initiatives were aimed at improving the accessibility to structured and unstructured data and to the knowledge held by people, improving the corporate memory, and developing the right culture. In particular, they focused on infrastructure issues such as the tools required.

On the other hand, among the challenges in its KM initiatives were difficult cultural and leadership issues. There were also several smaller initiatives, including increased use of information mapping techniques, as well as the use of scanning with a pilot on how best to enable access to documents that were not currently available online. As well as improving the Bank's infrastructure tools, some of these initiatives are also intended to reinforce the values of the organisation, for example, in support of providing a family-friendly environment. [Source: Extract from Reserve Bank of New Zealand: Journey Towards Knowledge Management, 2005].

Question 1: The aim of a strategic approach to KM is "to build, nurture, and fully exploit knowledge assets through systems, processes, and people and convert them into value as knowledge-based products and services" (Earl, 2001, p. 228). Elaborate further on how knowledge has been developed at the Reserve Bank.

Question 2: With reference to the case study, how can leadership style impact the KM initiatives of an organisation?