A model for sustainable operational excellence through knowledge management practices and continuous improvement principles

Integrating Knowledge Management maturity with associated Continuous Improvement efforts in order to remain competitive, is absent in most Operational Excellence initiatives. Furthermore, the intertwined relationship of Continuous Improvement and work development becomes a crucial focus area for organisations that wish to establish a continuously evolving management system consisting of core values, methodologies and tools with the aim of creating more satisfied customers with less resources. The old industrial paradigm that focused on labour, capital, materials, and energy viewed technology and knowledge as external influences on production. This framework is now being challenged and a new trend is emerging. This trend seeks to transform the old industrial system to that of a knowledge-based which one can lead to innovation and hence economic advantage. Continuous Improvement as a concept has roots in many other fields, including social-technical system design, human relations progress and the discussion surrounding ‘lean manufacturing’. This study will focus on Continuous Improvement as a noun, referring to on the outcome of the process of a stream of emergent innovations. The primary objective of the study is to create a model that will present an organisation with a three-layer knowledge reference process grid, which will align and depict the surrounding business knowledge functions, knowledge-enabling processes and knowledge-manipulating processes aiming for enabling Operational Excellence. This study promotes the theory that the cognitive domain layer, functional domain layer and resources layer of an organisation can be increasingly stimulated by focusing effort through Continuous Improvement routines towards the associated inter-organisational knowledge processes sustaining Operational Excellence. The proposed model is structured to review, compare, evaluate and integrate existing Knowledge Management practices of ii an organisation within the context of clear definitions for important concepts of Knowledge Management. Additionally the model provides an assessment instrument for evaluating the organisation’s Knowledge Management maturity level. The study concerns itself with two concepts towards business value creation which will lead to increased Operational Excellence. Firstly, the maturity of Knowledge Management processes, and secondly the level of the organisation wide process of focused and continuous incremental improvement namely, Continuous Improvement. A case study with PriceWaterhouseCoopers was concluded and an on-line Internet survey was used with a stratified sample from knowledge workers to test the factors from both a Knowledge Management and Continuous Improvement perspective. These factors were verified by means of a hypotheses network, describing in a structured and descriptive way, the importance of Knowledge Management and Continuous Improvement collectively on sustainable Operational Excellence as an integral development of Operational Excellence. With respect to Knowledge Management practices, the hypothesis network proposed at least three domains, which of knowledge generation, knowledge mobilisation and knowledge application as important input to the proposed process grid of knowledge development and associated layer elements. From a Continuous Improvement principles perspective it is apparent that elements from Continuous Improvement routines and Continuous Improvement characteristics are associated with the organisation Continuous Improvement ability. These findings are also a result of the deliberate design of processes, tools, structures and environments with the intent to increase, renew, share or improve the use of knowledge represented in any of the three elements for structural, human and social of intellectual capital. The proposed model combines the framework of the Boyd cycle as it is conceptualized as self-assessment activities, for it becomes possible to use them as basis of a self-assessment with sense making navigational properties across iii the proposed knowledge process grid for the model. The model will facilitate the concept of a three-layer knowledge reference process grid, which represents the main components of the knowledge processes within the cognitive domain layer, functional layer and resources layer of an organisation. The proposed model will deliver a single value that co-exists with the Knowledge Management maturity level and Continuous Improvement readiness index rating attained. Logical relationships to dynamic, evolving and flexible enabling Knowledge Management practices for each layer of the proposed three-layer knowledge reference process grid will be integrated as output of the proposed model. The research has limitations as Knowledge Management practices were measured using a subjective norm scale. It is suggested that a more comprehensive measure of Knowledge Management maturity processes may be needed to represent this construct. The complexity of the proposed model and the number of associated variables included in the results need further confirmation using possible multiple samples and additional measures of Knowledge Management maturity and Continuous Improvement readiness elements. The benefit of the proposed model as a practical Operational Excellence tool is to overcome the perceived gap of implementing Knowledge Management practices and Continuous Improvement principles collectively to deliver and sustain Operational Excellence