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Should your company be doing knowledge management? Many companies are profiting from combining business processes with technology to create a collective corporate memory.

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Knowledge management isn't nearly so complicated as the gurus make it sound. First, know what you know. Then profit from it

Justin Miller just laughs when you ask him what the term knowledge management means. "I haven't a clue," says the president of Affordable Technology, a $9.5-million computer manufacturer in Beaverton, Oreg. "Does it have something to do with controlling the noise in my head? Is it making sure people know enough?"

Although Miller sounds like a knowledge neophyte, he's not: Affordable Technology practices the art of information-sharing with fervor. Nonetheless, its president can be forgiven for not producing a simple definition of what may be the most abused management phrase in the business-management lexicon. These days, the term knowledge management is applied to everything from a simple phone call to a multimillion-dollar data-warehouse project to the exotic indexing habits of librarians. Yogesh Malhotra, founder, chairman, and chief knowledge officer of the @Brint Institute, a business, technology, and knowledge-management network in Fort Lauderdale, Fla., recalls how one publishing company approached him for advice about starting a magazine on the topic. "They seriously asked me, 'Do you think a scanner is a knowledge-management product?" says Malhotra. "I laughed."

Knowledge management isn't just defined broadly; it's often defined badly as well. Something about the subject makes normally lucid people--not to mention academics and consultants--sound as if they've stuck their tongues in a meat grinder. Malhotra, for example, a regular guy in conversation, turns into an academic Mr. Hyde when describing a knowledge-based company in an article on his Web site. "[It] embodies organizational processes that seek synergistic combination of data and information-processing capacity of information technologies, and the creative and innovative capacity of human beings," he writes.

Yet despite the daunting language and fuzzy definition, knowledge management is a booming industry, with a multitude of books, journals, conferences, Web sites, consultancies, curricula, and, of course, software products devoted to it. One reason there's so much activity in a field so few people understand is that knowledge management sells. What company--presuming it has some knowledge-- doesn't want to manage it? "It's come to the point where a lot of people are focusing on how to make a quick buck out of the term, regardless of what people need," Malhotra concedes.

But knowledge management is also hot because it's an important--and ultimately a simple--concept. Hewlett-Packard CEO Lew Platt touched on both those characteristics in his widely quoted observation that "if HP knew what HP knows, we would be three times as profitable."

These days HP has a pretty good handle on at least some of its knowledge, thanks to a mid-1990s initiative that amassed the collective wisdom of tech-support personnel into an intranet and a sophisticated Lotus Notes database. That project alone cut the cost of a support call by 50% and its length by two-thirds. And large corporations aren't the only ones building systems to harness their smarts. Even as Miller shakes his head over "Knowledge Management: The Concept," technicians in Affordable Technology's lab are scribbling component-making tricks into a "solutions log" and scanning their findings into an Excel file on the company's network server, from whence they can be easily plucked by other employees. Meanwhile, customer-support reps are recording problems and solutions in a Microsoft Access database so that they can tap into existing answers when customers call. Sales reps plunder the same source to keep apprised of customer concerns, as well as add to it information they pick up in the field.

Although the knowledge-management initiatives at Hewlett-Packard and Affordable Technology are very different in scope, they boil down to the same thing: combining business processes with technology to create a collective corporate memory. When done correctly, such initiatives ensure that all of a company's practices are best ones, that time isn't squandered on wheel reinvention, and that valuable experience doesn't trail departing employees out the door.

Of course, capturing everything an organization knows is probably impossible. So the first step in any knowledge-management project is identifying what knowledge it pays most to master. "Do you want to have a better relationship with your customers? Build a better product? Make a project or sales process run more smoothly?" asks Tom Davenport, professor of management information systems at Boston University, director of the Andersen Consulting Institute for Strategic Change, and coauthor of Working Knowledge: How Organizations Manage What They Know (Harvard Business School Press, 1998). "Once you decide what kind of knowledge really matters to you, you can ask yourself how you create it, capture the techniques and processes that work best, and then share them."

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