Connecting the Dots: KM Initiatives and Business Performance
Moria Levy and Nurit Linn
Management & Information Science, Bar Ilan University, Ramat Gan, Israel
MA Applied Organizational Sociology, Haifa University, Aba Khoushy Ave, Mount Carmel, Haifa, Israel
Keywords: Knowledge Management, KM, Improvement, Business Performance, Organizational Change, Case Study,
Foster Care, Care Services.
Abstract: For over two decades now, knowledge management (KM) has been an academic discipline, extensively
taught, learned, and researched. It has been practiced in organizations for a similar period. However, demon-
strating long-term improvement in business performance as a result of KM initiatives is not an easy task. KM
processes and changes are rarely standalone and usually go hand in hand with other organizational changes.
This in itself makes it difficult to demonstrate that said organizational changes originate from KM initiatives,
and not from other changes in the organizational environment.
This research provides a case study in which shifts in organizational performance as a result of KM initiatives
can be examined. This research is significant for KM researchers because it suggests a new research model
for further studies. In addition, it provides organizations with an optimistic vision, namely that systematic
management of organizational knowledge assets is not merely an idea that sounds good, but can actually be
proven to be effective. Connecting the dots between KM and business performance is a known challenge.
However, thanks to our research model, it is easier to overcome this challenge.
The research method is based on a qualitative and quantitative case study in which foster care activities in
Israel underwent KM intervention for a period of eight years. During this period, failures of foster care cases
resulting in unsuccessful placement dropped by 32%, with KM being a major factor contributing to this
change.
The research has several limitations. Although KM was the main variant during the years covered by this
research, there is no guarantee that other factors—unnoted by researchers and the people interviewed—did
not also affect foster care services, and therefore influence fostering performance. In addition, any case study
research based only on one case is limited in its ability to suggest a generalized hypothesis.
This research is original and somewhat unique. It is one of very few studies that demonstrate the relationship
between KM initiatives and business performance.
1 CONNECTING THE DOTS: KM
INITIATIVES AND BUSINESS
PERFORMANCE
Knowledge is one of the most valuable assets in any
organization. According to Peter Drucker, the first
scholar who defined the Knowledge Worker:
“knowledge is the only meaningful economic
resource” (Drucker, 1995).
Research on how these knowledge assets can be
managed is relatively new. The first studies were
published in the early ’90s. They included “The
Knowledge-Creating Company” (Nonaka, 1991) and
“A model of Knowledge Management and the N-form
corporation” (Hedlund, 1994).
One of the significant challenges of research in the
field of social studies in general, and specifically in
Knowledge Management (KM), is evaluating the
influence and contribution of KM interventions to
business performance. As for KM, this is true both
because it is a relatively "young" discipline and
because of its affinity to social studies.
KM interventions usually take a long period. In
many cases, it takes several years to complete a
thorough organizational change.
In most organizations, KM processes are
intertwined with other simultaneous processes, thus
making it difficult to evaluate the influence of
Knowledge Management as a standalone factor of
organizational transformations, external or internal
ones.
Levy, M. and Linn, N.
Connecting the Dots: KM Initiatives and Business Performance.
DOI: 10.5220/0010046701470152
In Proceedings of the 12th International Joint Conference on Knowledge Discovery, Knowledge Engineering and Knowledge Management (IC3K 2020) - Volume 3: KMIS, pages 147-152
ISBN: 978-989-758-474-9
Copyright
c
2020 by SCITEPRESS Science and Technology Publications, Lda. All rights reserved
147
That being said, research on KM effects is very
important: “the emergent literature in knowledge
management speaks to the importance of being able
to measure the impact of KM in the organization as
an essential element in refining its efforts and
justifying its expense” (Kern, 2008, pp. 57-58).
Connecting the dots between KM initiatives and
business improvement is a motivation widely
discussed in research. However, limitations exist as to
the nature of the challenges, as described. The level
of the type of linkage also varies among research
papers.
This paper describes a unique case study of the
foster care services in Israel, in which knowledge
sharing and knowledge development led strategic and
policy-based-decisions during the years of 2007 and
2015. Prior to this period, two major external changes
took place in the foster care services: the privatization
of the services in 1998-2001 and the amendment of
the foster care services law in 2016. During the period
in question (2007-2015), no major changes occurred,
while internal decisions regarding policy, regulation,
and working instructions were triggered by ideas and
recommendations from the knowledge development
teams. Cases that were triggered by factors other than
KM were "translated" by the knowledge development
teams in order to implement them in accordance with
KM guidelines. As a result, there is a strong case for
research and evaluation of the results, and for
connecting these results to KM efforts.
The aim of this research is to learn whether and to
what extent KM has affected the business results of
the foster care services in Israel.
2 LITERATURE REVIEW
Shift In Performance as a Result of Knowledge
Management Initiatives. Evaluating a shift in
performance as a result of initiatives in social science
studies is, in most cases, far from being an easy task.
In KM studies, this has been an ongoing effort,
starting from the first days of Knowledge
Management as a discipline, and continuing to date.
Even though the question of whether a significant
shift in performance is a result of KM initiatives is of
great importance, only a small percentage of studies
explicitly aims to address this issue.
Dalkir in “Knowledge Management in Theory and
in Practice” (2017) addresses the issue of proving this
connection as a challenge: “Knowledge assets are a
source of competitive advantage for firms that
possess them. Yet the way the possession of
knowledge translates into a competitive advantage is
not well understood.” (p. 313).
Wickhorst in “Measuring the ROI on Knowledge
Management Systems” (2002) states that “Illustrating
the return-on-investment (ROI) for a portal solution
or Knowledge Management (KM) system has proven
an elusive target” (p. 96).
Muthuveloo et al., (2017) review the connection
between tacit KM and organizational performance,
and review evidence from Malaysia as to the
connection between the four layers of tacit
knowledge—socialization,externalization,
combination, and internalization—and organizational
knowledge (p. 196).
In Making cents out of knowledge management,
Liebowitz (2008) cites an interview with Mike
Anderson, the director of information systems at
Buckman Labs: “it is difficult to put a dollar figure on
the value of this resource” (p. 43). The book covers
ten case studies, half of which deal with measuring
business outcomes.
The collection Measuring the ROI of knowledge
management (Roche, 2013) explores the challenges
of ROI measurement from different perspectives.
Howley, for example, suggests speaking in terms of
‘justifying the investment,’ while measuring benefits
delivery and sharing success stories. Bostelman
considers the positive influence of KM on financial
drivers. Boisssonnet diverts the discussion to return
on knowledge, arguing that potentially, “well defined
KM strategies can influence innovation, performance
and productivity” (p. 53). Few case studies directly
aim to measure a shift in performance.
A number of studies, such as “Determining the
Business impact of Knowledge Management”
(Aaron, 2009), do analyze cases in which continuous
KM interventions take place and the shift in
performance or even ROI are measured. Additional
research has studied the business outcomes resulting
from integrated interventions, including intellectual
capital, KM, human resources, organizational
behavior, information technology and accounting
(Bontis & Fitz-Enz, 2002). Several studies have
evaluated knowledge retention projects, describing
specific knowledge gained from knowledge transfer
activities, as well as the savings resulting from those
segments of knowledge (i.e., McManus et al., 2003).
Nonetheless, studies that include a chain of
evidence involving complementary research, as well
as both quantitative and qualitative evidence, are
extremely rare.
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2.1 The Case of Foster Care Services in
Israel
The Need for KM. The state of Israel, like many
other states worldwide, assumes responsibility for
children whose biological family cannot care for
them. As part of this responsibility, some children are
assigned temporary placements, whether in institutes
(popular placements in Japan and Israel) or in
families (placement in foster care). Foster care
services in Israel were privatized in 2001. Three years
later, in 2004, the Ministry of Social Affairs and
Social Services recognized that even though the
change yielded a major increase in such
services, the
Ministry itself was losing knowledge and potentially
stood to lose the ability to professionally lead policies
and to effectively supervise the privatized service.
Knowledge had become an asset of private bodies
that might be financially driven. The need for
governability increased as a result of privatization. At
the same time, the ability to fulfill this mission
decreased, as the knowledge was distributed. The
professionalism of the discipline was at risk in all
respects because of these changes (Korazim-Kőrösy
& Leibowitz, 2005).
The Knowledge Management Intervention. In
2007 a continuous process was initiated, which lasted
until 2015. This entailed the analysis of the processes
undertaken by foster care services and the designation
of ten teams. The aim was to develop a doctrine based
on field knowledge and research, encompassing
professional foster care services. Learning was based
on the ‘case study approach’ and KM methodology
described in Levy (2008) and Sabah and Cook (2010).
3 RESEARCH FRAMEWORK
The research described here aims to ascertain whether
the influence of KM interventions can be evaluated
and measured. The method chosen is a single case
study. The research thesis is that the link between KM
activities and business results can be proven in some
KM interventions, especially in cases where the
intervention is applied for a long period and where
circumstances are such that all major changes are
related to KM.
A linkage between change initiatives and business
results can be proven if there is evidence of (a)
significant change initiatives; (b) improved business
results; (c) knowledge and implementation of the
changes discussed above; (d) linkage by main
stakeholders between change initiative and results.
Figure 1: Research theoretical framework.
Hypothesis: KM initiatives performed [a], known
and implemented [c], improve business results [b].
4 METHODOLOGY
Multiple sources were chosen to investigate whether
the hypothesis can be proven, establishing a chain of
evidence:
[a] Existence of significant change initiatives.
Gleaned from documentation— evidence of
learning activities, knowledge sharing activities,
and new knowledge bodies. We examined 124
documents supplied by the Ministry of Social
Affairs.
[b] Existence of improvement in business
results: Improved business results were assessed
from three aspects: Was there a change in
addressing children who were placed in
fostering settlements? Are fostering families
satisfied with the settlement (based on external
research conducted before, during, and after the
period of intervention)? Were there fewer non-
successful endings of such settlements (based on
quantitative data from the Ministry of Social
Affairs regarding fostering settlements—
quantities of children in the settlement, the
period of time of foster care for each child—the
duration of the child’s stays, and how the foster
placement ended).
[c] Knowledge and implementation of the
discussed changes: Determined using a survey
and through interviews of the workers who are
to implement the changes. Both managers and
field workers were addressed (121 workers out
of 170 answered the survey; 25 interviews were
conducted). Questions addressed the familiarity
of the knowledge, tools, and ease of use.
[d] Linkage between change and results: One of
the reasons for choosing the test case was the
high probability for linkage due to the
Connecting the Dots: KM Initiatives and Business Performance
149
following. First, the intervention period was
long (7 years). Second, in this period, all policy
changes within the organization were linked to
the knowledge interventions. Third, the external
changes that had effect, occurred before and
after this period, not during it. As linkage has to
be proved, a survey and a series of interviews,
as described above, were conducted. Employees
who were to use the knowledge and see its
benefits in their work were asked if and to what
level the knowledge contributed to the
improvement of their work and their results.
This indicated whether a linkage existed what
the linkage was.
5 FINDINGS
We offer several major findings (described in
alignment with the theoretical framework).
KM Change Initiatives [a]. Finding: From 2007 to
2014, an additional KM change initiative was
initiated every 6-12 months. In all, there were 9
initiatives, each including the development and
sharing of knowledge:
selection of families to serve as foster
families (knowledge developed in 2009);
matching of children with foster families
(knowledge developed in 2007);
preparation and training of foster families
(knowledge developed in 2010);
supporting the safe re-attachment of the child
with foster parents (knowledge developed in
2008);
handling the issue of sexual assaults
(knowledge developed in 2008);
guiding the foster families (knowledge
developed in 2011);
handling children with special needs
(knowledge developed in 2013);
working with the parents while the children
are in foster care placements (knowledge
developed in 2014);
predicting and handling warning signals as to
fostering health (knowledge developed in
2007).
Business Improvement [b]. Finding: More children
were sent to foster care placements. Operating bodies
found the knowledge development teams to be a tool
of cooperation, leading to mutual consultation and
learning. A higher percentage of children were sent to
foster care placements. Table 1 includes details of the
changes over the years. There was a 15.7% increase
in the number of children sent to foster care
placements (530 additional children in foster care, as
compared to continuing previous assignment ratios).
A contributing factor to this change, according to
Korazim is the high rate of professionalism of the
field workers, which is highly appreciated by the
management of the Ministry of Social Affairs.
Table 1: Fostering preferred as a placement for children.
Percentage
change
Children
placed in
foster
care
Children
placed
away
from
home
Year
12.1% 3,323 27,373 2006
12.3% 3,418 27,704 2007
11.9% 3,392 28,470 2008
11.8% 3,402 28,695 2009
13.0% 3,548 27,125 2010
13.5% 3,738 27,680 2011
14.0% 3,812 27,126 2012
15.7% 3,853 (missing)2014
+530 -247 Change in
numbers
+15.7 -0.9% Change %
Finding: Fostering families (parents) were highly
satisfied with the professionalism of the foster care
social services’ (2014). A majority described their
satisfaction level as ‘satisfied’ or ‘very satisfied’ in
the following aspects, as presented in Table 2.
Table 2: Parents’ Satisfaction.
Percentage of
satisfied parents
Aspect
91% Having fostering-
related knowledge
90% Emotionally
supporting
89% Understanding
family needs
88% Understanding the
child’s needs
81% Giving helpful
advice
Finding: The foster care placements were stable.
We found that 68% of the children had remained in
the same foster care family since they left home.
Fewer foster care placements ended unsuccessfully.
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The literature points to the fact that stability and
duration of placement have a great influence on the
chances of rehabilitation (Brooks et al., 2005;
Rushton, 2004; Simmel, 2007; Wrobel et al., 2006;
Sorek et al., 2014).
Stability is based on several factors, including
moving between placements, between families, and
unsuccessful placement ending.
The business success analysis of unsuccessful
endings is based on the issues dealt with and
developed during the intervention. Unsuccessful
endings can occur, triggered by unpredictable and
unpreventable circumstances, but professional work
can affect and lower the ratio of unsuccessful endings.
The ratio of unsuccessful foster care endings was
found to be the most relevant business success
indicator, with regard to the knowledge acquired and
shared.
Finding: There was a decrease of 32% in the rate
of unsuccessful placement endings (Figure 2).
Figure 2: Unsuccessful Placement Ending Percentage.
Knowledge Was Acquired and Implemented [c].
Finding: The survey revealed that employees were
familiar with the knowledge and tools of the field and
used them. We found that 97% of employees are
familiar with the knowledge and tools developed.
71% of employees find the knowledge easy to access.
78% find the tools easy to access. 68% find the tools
professional and easy to use. 69% were trained based
on the knowledge and tools developed.
Interviews support these findings and the usage of
these tools in daily routine.
Linkage Between Performance Improvement and
Knowledge Interventions [d]. Finding: The survey
revealed that employees found the knowledge
significantly contributed to their professionalism at
work. The knowledge contributes to their work,
according to 95% of employees; of
these, 51% stated
that there was a high level of contribution and 7%
stated there was a very high level of contribution.
99% of employees stated that the training course
based solely on the knowledge developed contributes
to their work; among them, 88% stated that there was
a high or very high level of contribution.
Interviews strengthened these findings, although the
level of contribution varied among the issues
developed and studied.
6 DISCUSSION
Connecting the dots between a change and business
results, as described in the literature, is not trivial.
After proving an improvement in the results, these
results must be linked to the change performed. The
linkage is not easy to identify because in any given
period we usually experience more than one change
simultaneously. Therefore, a common method—
demonstrated in the literature, and also used here—is
to make this linkage by questioning stakeholders,
using qualitative tools to capture their understanding
of the contribution of the change to the results. In that
manner, this research relies on the same strategy to
validate the connection, including both a large survey
and a set of interviews.
The findings in this research prove that there is a
relationship between the change and business results
and that the KM efforts were beneficial in terms of
lowering unsuccessful endings of foster care
settlements.
However, the case in research also demonstrates
the strength of the test case: A criteria list can be
defined based on the case, suggesting where there will
be a higher chance of linkage between the change and
the results:
Establishing a connection between KM activities
and the improvement of business performance is valid
when the following conditions exist:
KM activities are performed for a decent
period, enabling impact (at least several
years).
During this period, no major external factors
change the characteristics of the business
activity.
During the same period, strategy decisions,
policy decisions, and all other major
decisions are based on KM initiatives, and
their implementation is accompanied by KM
activities.
There is an applicable quantitative method to
measure business performance.
28%
29,80%
21,70%
23,50%
22%
19,00%
0%
10%
20%
30%
40%
2005 2007 2009 2011 2013 2015
Unsuccessful endings of
foster care placements
Connecting the Dots: KM Initiatives and Business Performance
151
There is an applicable qualitative method to
validate the connection between KM efforts
and business results.
The research conducted has practical and
managerial implications; it not only sheds light on a
successful KM effort, but also enables further usage
of the suggested model to test future links between
changes activities and business results.
The research described offers a strong chain of
evidence for these linkages, yet it has limitations that
weaken its conclusions. These limitations include a
lack of a control group and a comparison that is based
solely on the dimension of time. Furthermore, the
proposed model is based only on one case study,
which naturally limits the ability to generalize our
findings.
7 CONCLUSION
When dealing with real life, real people, and soft
changes, proving connections between activities and
results is not an easy task. There is no way to prove
that changes are the result of a specific intervention.
This research provides a strong chain of evidence
regarding such a connection in the foster care services
in Israel, triggered by KM interventions. This case
study may be used as a model for additional research
on linking KM activities and business results. It can
also encourage organizations to apply KM activities,
demonstrating the power of significant KM to
business performance.
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